A full guide to Toast and its IPO

Founded in 2011 and launched in 2013, Toast provides a software platform to help restaurants manage online ordering, keep up with their on-demand delivery network, and fully integrate all payment channels.

The software company claims restaurants using its platform have outperformed their rivals by between 10% and 30%. Whether that is in terms of revenue or some other metric is unclear.

If that is indeed the case, part of this may be explained by Toast’s additional claim to reduce third-party delivery commissions by up to 80%.
Neither of these statistics have been independently verified.

In addition, Toast can optimise, manage, and integrate the ordering process. Its software can assist with marketing – such as email campaigns and website maintenance – and control payroll and team management.

As of August 2021, Toast had partnered with about 48,000 restaurants and processed more than $38 billion in gross payment volume over the previous 12 months.

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How does Toast make money?

Toast is a software-as-a-service business, essentially providing its tech on an ongoing basis while requiring businesses to pay it a percentage of total sales each month.

Its starter pack costs 3% of a restaurant’s sales a month. The package is intended for small restaurants with a maximum of two outlets and provides management of all ordering and delivery requirements with nothing to pay up front. Toast will even provide some essential tech hardware free of charge.

Restaurant groups with up to 15 outlets can apply for a “growth” quote, while big chains of 16+ restaurants are invited to sign up to the “enterprise” package.

What is Toast’s business strategy?

Toast has a business strategy that relies on hammering home the message to restaurants that it is in their interests to improve efficiency by signing up to a Toast package.

For example, some customers have reported that they are able to turn tables (that is, get new customers onto previously occupied tables) more rapidly thanks to Toast software.

Effectively, it wants to steer restaurants away from the temptations of partnering directly with delivery companies while trying to manage other logistical affairs in-house.

Toast also puts a big emphasis on its 24/7 customer service. Its future plans involve continued focus on customer service and possibly helping restaurants capture guest data to help formulate loyalty and marketing programmes.

Is Toast profitable?

Toast is not yet profitable. In February 2020, just as the coronavirus pandemic was beginning to dig its claws into the hospitality industry, it reported rapid year-on-year growth, but there were no forecasts over when profitability would be achieved.

It then, predictably, suffered quite badly as lockdowns rapidly pitched restaurants at crisis point, and Toast had to cut 50% of its staff.

But the pandemic also had its upside, allowing its team to fine-tune its platform so that when restaurants were at least able to offer regular delivery services it was well placed to start conversations with prospective clients again.

What was behind Toast’s recovery? 

Toast’s software helped restaurants shift rapidly from in-house dining, something the pandemic had almost extinguished, to a system that allowed diners to order meals for takeout or delivery.

In March 2020, CEO Chris Comparato told clients that Toast was providing “millions of dollars in the form of a one-month credit of software fees for all Toast customers, as well as free access to its software for online ordering, takeout, gift cards and marketing.”

Who is on the Toast Management Team?

• Chris Comparato, CEO
• Steve Fredette, President, Co-Founder 
• Aman Narang, Co-President, Co-Founder & COO
• Jonathan Grimm, CTO & Co-Founder
• Annie Drapeau, Chief People Officer
• Anisha Vaswani, Chief Information Officer
• Elena Gomez, Chief Financial Officer
• Emmanuelle Skala, SVP of Customer Services
• Jonathan Vassil, SVP of Sales
• Kevin Hamilton, SVP of Marketing
• Hugh Scandrett, SVP of Engineering
• Matt Kaplan, SVP of Product
• Nick DeLeonardis, SVP & GM, Employee Cloud + FinTech
• Brian Elworthy, General Counsel
• Julisa Salas, Chief of Staff, Executive Team
• Jennifer DiRico, Head of Finance

Board of Directors of Toast

• Aman Narang
• Chris Comparato
• David Yuan
• Deval Patrick
• Kent Bennett
• Mark Hawkins
• Paul Bell
• Steve Fredette
• Susan Chapman-Hughes