Toast, a point-of-sale (POS) platform aimed at restaurants and catering businesses, has announced a fresh $115 million in funding led by T. Rowe Price, with participation from Tiger Global Management and existing investors such as Bessemer, Generation Investment Management, and Lead Edge Capital. Another notable existing investor, Alphabet’s investment arm GV, elected not to participate in this round of funding.
With a valuation of $1.4 billion, the Boston-based startup has also now gained entry into the much-coveted unicorn club.
Founded in 2011, Toast offers a POS system that integrates with restaurants’ front-of-house, back-of-house, and online systems while also serving up data and insights into sales patterns, costs, and customer loyalty trends.
A few months back, Toast also launched a new handheld device called Toast Go, enabling waitstaff to send orders directly from the table to the kitchen and giving them access to ingredient information and real-time menu item availability.
Prior to now, Toast had raised $134 million, including a $101 million chunk less than a year ago, and with its series D raise now in the bank the company said it plans to double down on its R&D investments.
The U.S. restaurant business is an $800 billion industry and accounts for around 15 million jobs. We have seen significant investment in technologies designed to streamline small businesses, such as restaurants, and make it easier for them to accept payments digitally. A few weeks back, Toast rival TouchBistro raised $55 million, while last year Lightspeed POS raised $166 million with a view to going public in 2019. Other popular point-of-sale systems include Jack Dorsey’s Square, which has been investing in its food-ordering platform Caviar through multiple acquisitions. In Europe, Square rival iZettle was recently acquired by PayPal for more than $2 billion.
Toast said it has grown its revenues by 150 percent over the past year and that it now employs more than 1,000 people across the U.S.
“The way restaurants serve their customers is going through a fundamental change, and the technology that enables restaurant operations must respond to these new demands. Toast does this,” said Henry Ellenbogen, portfolio manager of T. Rowe Price New Horizons Fund. “Our investment in Toast reflects our belief in the firm’s ability to become much larger over time.”