Toast prices IPO at $40 a share, way above range, for $20 billion valuation

Toast is ready to raise some serious bread.

Toast Inc.
a restaurant-focused payments company, priced its initial public offering at $40 a share late Tuesday, significantly above its expected range of $34 to $36 apiece. That range had already been raised from the original $30 to $33 a share.

The company will raise $868 million, based on the 21.7 million shares it’s selling, for a valuation of about $20 billion.

Shares are set to begin trading Wednesday on the New York Stock Exchange under the ticker symbol “TOST.”

Toast IPO: 5 things to know about the restaurant-focused payments player

Toast makes software for restaurants that allows them to manage functions like business operations and online ordering, and the company also processes payments for restaurant customers. It sees opportunities to grow internationally and get existing customers to use more of its services.

The company lost $235 million on revenue of $704 million during the first six months of 2021, whereas it lost $125 million on revenue of $344 million in the first six months of 2020.

Toast is betting that it can continue to win customers by delivering a focused offering full of services that cooperate with one another. Early on, the company found that restaurant owners were frustrated by older systems that didn’t connect well with each other, and Toast notes in its prospectus that many are still reliant on older processes like paper invoices and handwritten takeout orders.

While restaurants were hit hard by the pandemic, some used the crisis to upgrade their technology and make it better suit the realities of COVID-19, according to the company. Toast offers products and services around online ordering, curbside takeout notifications, contactless payments, and flat-fee deliveries.

Toast’s IPO comes as the Renaissance IPO ETF

has risen 5.9% so far this year and as the S&P 500

has gained 15.9%.

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