By Krystal Hu and Noor Zainab Hussain
Aug 27 (Reuters) – Toast Inc filed for an initial public offering (IPO) on Friday, as the startup that sells software to help restaurants with both online and in store orders cash in on the fast-changing needs of restaurant businesses amid the COVID-19 pandemic.
The Boston-based company reported $704 million in revenue in the first half of 2021, a 105% period-over-period jump. It has gained traction as restaurants look to save on third-party commissions and build a direct relationship with patrons during the pandemic.
Founded in 2011 and launched in 2013, Toast provides a software platform to help restaurants manage online ordering, operate an on-demand delivery network, and integrate payment among other things.
It has partnered with about 48,000 restaurant locations, and processed more than $38 billion in gross payment volume over the past 12 months.
Toast is expected to join a series of tech companies slated to go public this fall in one of the hottest years for IPOs. The company could be valued at $20 billion, the Wall Street Journal reported in February, citing people familiar with the matter.
Toast’s upcoming IPO will follow that of U.S. food delivery company DoorDash Inc, which was valued at more than $71 billion after its market debut in December.
DoorDash and rivals Uber Eats, Grubhub and Postmates have benefited from a surge in demand for food delivery services due to widespread COVID-19 restrictions.
Toast, which generates the majority of its revenue from its fintech solutions, hit a rough patch at the start of the pandemic because of lockdowns, and the company was forced to cut the size of its staff by half through layoffs and furloughs.
It has since seen a change in fortune by launching new products including delivery networks and contactless payment.
Toast was valued at about $5 billion in a private round in February. The company’s investors include TPG, Tiger Global Management, American Express Ventures, Bessemer Venture Partners, G Squared, TCV and Greenoaks.
Toast will list its stock on the New York Stock Exchange under the symbol “TOST.”
Goldman Sachs & Co. LLC, Morgan Stanley and J.P. Morgan are lead underwriters for the offering. (Reporting by Noor Zainab Hussain in Bengaluru and Krystal Hu in New York; Editing by Vinay Dwivedi and Chris Reese)