US-based restaurant management software producer Olo is going public today in a $450m initial public offering that will represent an exit for digital payment processor PayPal.
The company priced 18 million shares at $25.00 each, above a $20 to $22 range already increased from the original $16 to $18 range it set last week. The IPO is taking place on the New York Stock Exchange and will consist of class A shares, opposed to the class B’s owned by its current shareholders.
Olo provides software which manages restaurants’ on-demand ordering activities, helping them to accept online orders, organise payment and offer customers a more personalised service. The platform is used by some 64,000 restaurants and oversees 1.5 million orders per day.
The company made a $3.1m net profit in 2020 from $98.4m in revenue. The offering comes in the wake of about $65m in funding disclosed by Olo, not including an $18m secondary investment by hedge fund manager Tiger Global Management in 2018.
PayPal, Core Capital Partners, RRE Ventures and David Frankel supplied $5m for Olo in a 2013 round that boosted its total funding to $13.8m. It added $10m in a 2014 round led by Staley Capital before boutique merchant bank Raine Group invested a further $40m two years later.
PayPal’s stake in the company is lower than 5%, its larger investors being Raine Group (which owns 27.5% of its class B shares), Tiger Global (14.1%), RRE Ventures (13.7%), Raqtinda Investments (10.6%), Battery Ventures (9.7%), Staley Capital (7.7%) and Wellington Management (6.5%).
Goldman Sachs and JP Morgan are lead book-running managers for the offering while RBC Capital Markets is book-running manager and Piper Sandler, Stifel Nicolaus, Truist Securities and William Blair & Company are co-managers.
The underwriters will have the option over the next 30 days to acquire up to 2.7 million additional shares to at the IPO price, potentially boosting the size of the offering to more than $517m.
