There’s only one type of turnover that works in restaurants. It includes apples, hold the employees.
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In order to help restaurants better retain their hardworking employees, Toast, a Boston-based restaurant management upstart, has made its first-ever acquisition, StratEx, for an undisclosed amount. The acquisition, Toast’s first, will allow Toast customers to automate their HR and payroll services. Think services like employee on-boarding and scheduling, and labor law compliance.
“If you walk down the street in many cities in the US, you’re going to see help wanted signs in every restaurant,” Tim Barash, Toast’s CFO and chief business officer told Crunchbase News. Toast hopes that with this acquisition, some of those hiring woes will be resolved through the improvement of HR management.
Toast works with chains like Jamba Juice to Michelin-star rated restaurants, and all face shortages of talent, Barash added.
Finix‘s Richie Serna says that the acquisition “further validates the notion that vertically-focused SaaS is the new distribution method for services to run and grow small business.” He added that companies want a one-stop-shop to streamline all their operations, and dual-sided commerce is here to stay.
As Crunchbase News’s Mary Ann Azevedo reported back in June, Toast said that its revenue grew by 148 percent in 2018. Barash says the company is maintaining that same pace of revenue growth. Since we last chatted, Toast has added 500 more employees.
Toast, which launched its first product in 2013, says it has tens of thousands of restaurants that use its technology. This announcement comes just a few months after the company raised $250 million in a round led by TCV and Tiger Global, bringing its valuation to $2.7 billion.
Back then, the company said it plans to invest over $1 billion in R&D over the next five years “to continue building software and hardware designed specifically for the restaurant industry.”
This acquisition, it appears, is one of the first steps to satisfy that appetite.
Below is a chart on the company’s fundraising past.
Illustration: Li-Anne Dias