As Toast Orders Up IPO, A Look Back At Its Roller Coaster Year

The past 18 months or so have been full of ups and downs for Toast, the restaurant management software startup.

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The company is a Boston-based unicorn (and not in biotech) and it’s a leader in the world of restaurant tech: It’s main product offering is a point-of-sale system for restaurants. The company is gearing up for an IPO on Wednesday that could value it as high as $18 billion, as it raised its IPO share price range from between $30 and $33 to between $34 and $36.

But while the IPO could help the company raise more than $700 million and fetch a high valuation, it comes after a year or so of major highs and lows.

The COVID-19 pandemic

The company raised a $400 million Series F in February 2020, valuing the company at nearly $5 billion. Weeks later, the COVID-19 pandemic struck, and restaurants especially felt the hit after they were forced to end in-person dining. Toast CEO Chris Comparato wrote in an April 2020 blog post that restaurant sales in most cities declined by 80 percent.

With Toast catering to restaurants, the company felt the effects of the pandemic as well. Toast laid off or furloughed half of its employees, not even two months after its mega Series F funding round. 

Because restaurants had to pivot to takeout, Toast pivoted as well. The company launched Toast Delivery Services and the digital-only platform Toast Now so restaurants could offer online ordering, gift cards, and email marketing services, according to its S-1 filing. The company also rolled out a feature for contactless ordering and payment to keep in line with pandemic safety standards.

“While adversely impacting the restaurant industry and our business, the COVID-19 pandemic has also increased the focus by restaurants on the need for a digital technology platform that can address the need for safe, frictionless, contact-free experiences in restaurants and address off-premise dining,” the company wrote in the filing. “While we believe these trends may positively impact our business in the longer-term, we cannot predict the extent to which the increased focus on the need for digital solutions such as those offered by our platform will persist.”

The recovery

Toast saw its total revenue grow 23 percent between 2019 and 2020, according to its S-1, while its losses grew about 3 percent. Given that Toast took great measures to control expenses in 2020, including slashing its staff, it’s likely that helped with managing losses.

Most recently, Toast was valued at $8 billion following an employee share sale, according to CNBC.

When Crunchbase News spoke to Toast around the time of its Series F last year, former CFO Tim Barash said going public would be a goal in “the next few years,” adding that it would depend on the market context and the focus of the Toast team. Looks like that day came sooner than expected.

Illustration: Li-Anne Dias