What's going on?
Toast listed on the US stock market on Wednesday, and IPO-starved investors were more than happy to butter up the restaurant tech provider.
What does this mean?
Toast specializes in tech that allows restaurants to take payments, process orders, and track inventory. So it almost goes without saying that the company had a hard time last year, when foodies were swapping eateries for lap trays: Toast’s revenue plunged 80%, forcing it to halve its workforce just to stay afloat. But the company was also shrewd enough to pivot its focus to mobile ordering and contactless payments, and it now works with 78% more restaurants than it did two years ago.
So Toast decided to put that bouncebackability to the ultimate test by listing on the US stock market. And it’ll be glad it did: the company’s initial public offering (IPO) put its valuation at $20 billion – 150% higher than the $8 billion it was marked at last year.
Why should I care?
For markets: IPOs are in a good place.
Toast actually raised the price it would sell its shares on Tuesday after realizing that they were in such high demand, but the company still underestimated how popular they’d be: its stock jumped 63% on Wednesday. That’s an encouraging sign for the rest of this year’s stock market hopefuls: analysts reckon we’re headed into a few months so busy that it’ll tip this year’s number of IPOs into record territory.
Zooming out: Card is king.
It turns out Toast’s contactless tech was just the ticket at a time when no one wanted to handle germ-stained notes. The shift from cash to card is accelerating all over the world, but it’s particularly noticeable in the UK: data out on Wednesday showed Brits made more than 80% of payments using credit and debit cards last year.