Record sales following a massive staff reduction prompted point-of-sale (POS) restaurant technology (ResTech) startup Toast to hold a share purchase offering on an $8 billion valuation.
A Toast spokesperson told CNBC on Tuesday (Nov. 24) that, “in order to support our employees and former employees as they navigate the impact of Covid-19, we did complete a secondary offering recently.”
Toast reduced its staff in April by 1,300, roughly 50 percent, but has since recovered as COVID-19 prompted the pivot to digital restaurant sales and contactless payments.
Although the spokesperson would not comment on the valuation or who purchased the shares, a source told CNBC that current and former employees were offered the chance to sell up to 800,000 vested shares at $75 each.
The secondary offering gives Boston-headquartered Toast a valuation of about $8 billion, up from a $4.9 billion valuation pre-pandemic in February.
Ahead of the secondary offer, Toast advised stakeholders it was planning to offer to 800,000 shares totaling roughly $60 million, the sources said.
Founded in 2011 by Aman Narang, Jonathan Grimm and Steve Fredette, the startup closed a $400 million funding round in February at a $4.9 billion valuation.
Chris Comparato, chief executive officer at Toast, wrote in an April blog post that March restaurant sales plummeted 80 percent as the pandemic took hold and most of the country locked down.
“This is a massive disruption that hit the industry virtually overnight,” Comparato wrote. “Many restaurants that have temporarily closed may never reopen.”
Toast joins several tech firms — Doordash, UberEats, Postmates — that have benefited from the restaurant industry’s fast changeover to takeout, curbside pickup and outdoor dining.
DoorDash posted third-quarter revenue three times higher than expected; rival Uber Eats saw a 190 percent revenue surge.
The Toast platform facilitates and streamlines dine-in restaurants’ move to takeout and also enables easy gift card sales. According to the National Restaurant Association, per CNBC, almost 70 percent of restaurants added curbside pickup; some 15 percent of all eateries were forced to close their doors temporarily or permanently.
Last week, Toast launched a new suite of tools to help restaurants advance contactless transactions.