Toast soars 65% in IPO debut, valuing restaurant technology company at $33 billion

• Restaurant technology firm Toast soared as much as 65% in its IPO trading debut on Wednesday.
• Toast's trading debut valued the company at $33 billion, well ahead of its last private funding valuation of $5 billion.
• Toast priced its IPO at $40 per share, higher than its prior target range of $34-$36 per share.
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Shares of Toast soared as much as 65% in its IPO debut on Wednesday, handing the restaurant technology platform a valuation of about $33 billion.

The firm priced its IPO at $40 per share Tuesday evening, well above its expected range of $34-$36 per share, which was already raised from an initial target range of $30-$33 per share. Toast sold 21.7 million common shares in its trading debut, raising the firm $870 million in proceeds at a $20 billion valuation.

Toast was founded in 2011 and offers a software platform dedicated to restaurants that integrates payments and helps manage business operations and online ordering & delivery functions, among other restaurant-specific tasks.

The company had more than 48,000 restaurant locations using its software at the end of June, helping drive a 118% surge in year-over-year annual recurring revenue, according to its S-1 filed with the SEC. Toast generated $823.1 million in 2020 revenue, representing a 24% surge from the year prior.

In the first six months of 2021, revenue jumped 105% from the year prior to $703.7 million. Despite the strong growth rates, Toast is not yet profitable. The company saw a net loss of $234.6 million in the first six months of 2021, and a loss of $248.2 million for all of 2020.

Toast has come a long way from its last private funding round in February of 2020, right before the onset of the COVID-19 pandemic. The company raised $400 million at a $4.9 billion valuation, but soon had to pivot two months later due to the pandemic, in which it terminated 48% of its employees and reduced salaries.

Toast trades on the New York Stock Exchange under the ticker "TOST." The stock hit a high of $65.97 in initial Wednesday trades.