Toast Rising Against Pandemic Headwinds

Toast, the Boston-based restaurant management SaaS player, has recently completed a secondary offering. And the company’s valuation has since surged from $4.9 billion in February according to PitchBook, to $8 billion today.

Given its tight focus on restaurants, it’s no surprise that Toast has been on a rollercoaster ride since the pandemic began. The offering appears as a genuine attempt to help many of the company’s now-former employees earn some reward for their efforts. According to CNBC, employees were offered the opportunity to sell vested shares at $75 apiece. Employees (current and former) granted stock in Toast’s 2015 Series B round, the company’s largest, are likely to have plenty of vested shares. They stand to make a considerable amount given the $75 share price.

As a Toast spokesperson recently told CNBC, “In order to support our employees and former employees as they navigate the impact of Covid-19, we did complete a secondary offering recently.” 

Disruption Forces Change

Toast’s tight focus on the restaurant vertical makes it a great SaaS play. This allows it to deliver a highly specific product to a large vertical. Yet when a pandemic hits and cuts the legs out from under the dinner table, it forces dramatic change.

Money Keeps Flowing into Restaurant Vertical

The company took necessary action in April this year by cutting its staff by 1,300. That was nearly 50% of the Toast team. Fortuitously, the company has booked record sales since the pandemic which has no doubt significantly lowered the company’s CAC. The company has been deliberate in making important enhancements to its stack to make sure that it can help restaurant owners survive what is bound to be another challenging period ahead. 

Just this week the County of Los Angeles restricted all restaurants to pick-up and delivery only. According to reports, Toast has launched new tools to help restaurants push forward contactless transactions. It will be interesting to see how Toast and its customers navigate the next six to 10 months. It will take at least this long for the restaurant economy to return to some semblance of its prior self. Smart restaurant owners will realize that using platforms like Toast can lower operating costs and increase their overall effectiveness.

Yelp Drops $25M to Help Restaurants, Bars Through Crisis

 

Stay ahead of the curve and get the latest on Local straight to your inbox.

By submitting this form, you agree to receive communications from Localogy. You can unsubscribe at any time.

Related Resources

The Metaverse Meets Your Local Grocer

London-based Dent Reality wants to bring AR-guided store navigation from concept to reality. It raised $3.4 million to power in-store AR navigation last week and we explore the dynamics & drivers.