Restaurant tech company Toast is planning an initial public offering, sources familiar with the matter told the Wall Street Journal over the weekend. These people suggested an IPO could value the company at around $20 billion, and that Toast approached Goldman Sachs Group Inc. and JPMorgan Chase & Co. to underwrite a possible listing later in 2021.
Toast may also consider other options, such as a sale or a combination with a special purpose acquisition company (SPAC), WSJ sources said.
The speculation comes almost exactly one year after the COVID-19 pandemic forced the restaurant industry to close down dining rooms and significantly alter its focus towards meal formats like delivery, takeout, and curbside pickup.
Toast initially took a major hit from the effects of the pandemic. In April 2020, the company cut 50 percent of its staff through layoffs and furloughs. It cited the “massive disruption” otherwise known as COVID-19 that “hit the industry overnight” as the driver behind these cuts.
Over the rest of 2020, however, Toast’s situation improved dramatically, thanks to its ability to quickly shift direction. Unable to serve the dining room, the company started adding more off-premises-focused features to its restaurant tech stack, including software to facilitate delivery orders and a set of so-called “contactless” tools that enable digital ordering, payments, and menu browsing.
As of November 2020, Toast was valued at $8 billion, up $4.9 billion from February of 2020. An IPO would be one of the largest thus far for a restaurant tech company, following DoorDash’s December 2020 IPO, which valued the third-party delivery service at almost $40 billion.
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