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TCV and Tiger Global Management led the round, which also included participation from existing investors Bessemer Venture Partners, Lead Edge Capital and funds and accounts managed by T. Rowe Price Associates.
The raise comes about eight months after Toast reached unicorn status when it brought in $115 million in a Series D that included participation from Tiger Global, T. Rowe Price, and Eight Roads Ventures. (Read more about that here.) It also takes the Boston company’s total raised since its inception in 2011 to just under $500 million.
While Toast did not give exact revenue numbers, it did note in its press release that revenue grew by 148 percent in 2018. The company isn’t releasing specific metrics around growth in ARR, but Toast Senior Vice President of Marketing Kevin Hamilton told Crunchbase News that it was “roughly the same” last year. It’s that kind of impressive growth that new investor TCV found particularly appealing.
TCV General Partner David Yuan said his firm has been watching the company over the past few years and has been impressed with its ability to move from a POS (point-of-sale) product to an operating system for a restaurant, with both front office and back office functionalities. The evolution has resulted in a number of different revenue streams for the company.
“Very few companies are able to scale at these rates while maintaining or improving their growth rate and efficiencies,” Yuan, who will join Toast’s board of directors, told Crunchbase News. “They’ve executed incredibly well, building a big go-to-market.”
Founded in late 2011 by Steve Fredette, Aman Narang, and Jonathan Grimm, Toast first launched its product in 2013. It currently boasts that “tens of thousands of restaurants” are powered by its platform. In 2018 alone, the number of restaurants more than doubled, according to the company.
The 1,500-person 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.”
Its products include Toast Go, a mobile point-of-service platform, and Toast Guest Feedback, which are both aimed at helping restaurants speed up service “by up to 40 percent,” boost revenue and get real-time customer feedback.
“The adoption of [Toast Go] really accelerated growth and has also had a big impact in terms of visibility for Toast,” Hamilton said. He also said that the on-demand economy represents opportunities to elevate the guest experience as well.
“Restauranteurs are increasingly having to navigate this on-demand economy both from a physical perspective in the restaurant and from a digital perspective,” Hamilton expressed.
“We’ll always look at different paths to growth. Historically we’ve focused entirely on building and releasing our own capabilities,” Hamilton said in response to our queries about future acquisitions.
Toast also plans to use the new capital to do more hiring in its R&D, customer success, and sales and marketing departments.
So far in 2019 Toast said it has hired on-the-ground employees across the U.S. in addition to engineering teams in Dublin, Ireland by recruiting from the software, financial technology, and food & beverage industries.
Illustration: Li-Anne Dias