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Highlights
- Restaurant software provider Toast plans to raise up to US$ 717 million in upcoming NYSE IPO to be likely held next week.
- The shares are priced in a range of US$ 30 to US$ 33, which gives the company an approximate valuation of about US$ 16 billion.
- Toast was earlier valued at about US$ 5 billion in a private funding round held in February 2020.
Cloud based restaurant software provider Toast Inc is seeking to raise about US$ 717 million through its upcoming New York Stock Exchange (NYSE) initial public offering (IPO), thus giving it a valuation of about US$ 16 billion.
According to an updated IPO prospectus on Monday, the restaurant tech company is expected to publicly list next week on the NYSE and have the ticker symbol TOST.
Toast’s upcoming IPO details
According to Toast’s updated prospectus, the company has priced its around 21.7 million of Class A shares in a range of US$ 30 to US$ 33. This would help it raise over US$ 700 million from this IPO and also increases its valuation by 2x to US$ 16 billion from a secondary sale last year.
Toast was roughly valued at about US$ 8 billion from a 25 per cent secondary sale, held in November 2020.
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Toast’s investors had earlier valued the company at US$ 5 billion in a private fundraising round, just before the pandemic in February 2020. Some of the company’s investors include US private equity firm TPG, investment company Tiger Global Management, American Express’s strategic investment arm American Express Ventures and others.
Investment banks Goldman Sachs & Co. LLC, Morgan Stanley and J.P. Morgan are the banks handling the IPO transaction.
Shift in strategy
The company was doing well prior to the pandemic offering restaurant tech solutions by combining payments and inventory, amongst other services.
However, due to the onset of the health crisis, the company cut about 50 per cent of its staff as social distancing forced restaurant sales to tumble by 80 per cent in several locations.
But, the company quickly pivoted to a different strategy from an in house dining focused approach to delivery, offer takeout and related contactless and outdoor dining options.
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Bottom Line
The IPO comes on the heels of several food delivery companies booming during the pandemic as consumers chose to order in due to lockdown restrictions.
There has been an IPO frenzy among the tech enabled companies, with many other tech-based startups slated to publicly float this year. This includes cloud-based software firm Freshworks, global tech consultancy Thoughtworks, digital identity provider ForgeRock
