The startup that convinced America's most technology-resistant industry to adopt cloud software. Toast now powers over 120,000 restaurant locations and processes tens of billions in payment volume annually. They IPO'd in 2021 and the stock has been volatile, but the underlying business is strong. Restaurants that use Toast don't leave. The switching costs are enormous because Toast touches every part of the operation. It's boring enterprise software for an exciting industry.
Founded
2012
HQ
Boston, MA
Total Raised
$900 million
Founder
Steve Fredette, Aman Narang & Jonathan Grimm
Status
Public (NYSE: TOST) — market cap ~$18 billion
Website
pos.toasttab.comTHE ORIGIN STORY
Three MIT engineers were tired of watching restaurants struggle with terrible point-of-sale systems from the 1990s. The existing POS systems were expensive, clunky, and couldn't integrate with online ordering, delivery, or payroll.
They built Toast as an all-in-one restaurant management platform — POS, payments, online ordering, payroll, marketing, and analytics in a single cloud-based system.
WHAT THEY ACTUALLY DO
Hardware + SaaS + payments. Restaurants pay for Toast POS hardware, monthly software subscriptions ($0-165+/month per location), and payment processing fees (2.49-2.99% + $0.15 per transaction).
The payments revenue is the biggest piece — Toast processes billions in restaurant transactions annually.
THE PRODUCTS
Toast POS (point-of-sale hardware and software), Toast Online Ordering, Toast Payroll, Toast Marketing, Toast Capital (restaurant loans), Toast Tables (reservation management), Kitchen Display System.
HOW THEY GREW
Becoming the operating system for restaurants. Toast wants to handle everything a restaurant needs: POS, payments, online ordering, delivery integration, payroll, team management, marketing, loyalty programs, and financial services.
Also expanding internationally and moving into adjacent verticals like food trucks and catering.
THE HARD PART
Restaurant industry margins are razor-thin. Convincing restaurants to pay for new technology when they're barely profitable is brutal.
COVID nearly killed the restaurant industry — and Toast's business with it. They survived by pivoting hard to online ordering and contactless payments, which actually accelerated adoption.
WHO BACKED THEM
Bessemer Venture Partners, Tiger Global, T. Rowe Price, TPG, Lead Edge Capital
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