By
Bhushan Akolkar
April 12th, 2024
Toast has reportedly tapped Goldman Sachs and JPMorgan Chase as its lead underwriters for the proposed IPO this year.
American cloud-based restaurant software company Toast Inc is set to go public. As reported by the Morning Star, the firm’s pursuit to get listed on a stock exchange may either be through an Initial Public Offering (IPO) or via a merger with a Special Purpose Acquisition Company (SPAC).
The public listing is bound to give the firm a valuation of $20 billion according to people familiar with the matter. Per the report, there exist no guarantees that Toast Inc will eventually pull through with the IPO plans following any of the aforementioned options.
The US IPO market is off to a great start this year, as American businesses look to surpass the milestone recorded back in 2020, per companies that went public. Toast is likely aiming to model the growth of firms like Affirm Holdings Inc (NASDAQ: AFRM), and Bumble Inc (NASDAQ: BMBL), both of which made their stock exchange debuts this year, and are currently trading well above their IPO prices.
Toast Inc is a known cloud-based software provider for restaurants and related food businesses. The company’s unique offering provides its clients with operations management and a point of sale infrastructure built on the Android operating system. The company was founded in 2011 by Co-founders Aman Narang, Jon Grimm, and Steve Fredette. The trio launched the Point-of-Sale product in 2013.
Recovery from Coronavirus Pandemic: Boost for Its Toast IPO Plans
Toast’s business was highly impacted in the early months of the COVID-19 pandemic, as the ensuing lockdowns stirred a massive drop in revenue. According to the Morning Star report, The company’s Chief Executive Officer, Chris Comparato revealed in an April blog post that the firm will downsize its workforce by 50% as income had plunged almost 80%.
As businesses adjusted to the realities of the pandemic and adopted alternatives to serve their customers, the demand for Toast’s products began to rise, returning the Boston-based outfit back into the business. The growth is perhaps one of the driving triggers for this proposed IPO.
Toast has a valuation of $4.9 billion following a $400 million funding round almost a year ago. The liquidity raised was backed by investors including Bessemer Venture Partners, TPG, Greenoaks Capital, and Tiger Global Management LLC.
The firm has reportedly tapped Goldman Sachs Group Inc (NYSE: GS), and JPMorgan Chase & Co (NYSE: JPM) as its lead underwriters for the proposed IPO this year, according to the cited sources. In the latest development, Toast added American Express Company (NYSE: AXP). executive Susan Chapman-Hughes to its board of directors in the past week.