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Restaurant sales reached $ 825 billion last year in the US, but with average margins of only three to five per cent per company, they are still looking for an efficiency advantage and generally more management. smart things. A start-up called Toast, which has created a popular platform for restaurant management, has closed a substantial round of financing to double this opportunity.
The company raised $ 250 million worth of $ 2.7 billion to invest in building technology to help restaurants improve their marketing, recruitment and operational efficiency, and to consider extend to other territories outside the United States.
Funding basics were reported earlier in the day by Prime Unicorn Index and we contacted the company for confirmation. It is led by TCV and Tiger Global Management, with the participation of Bessemer Venture Partners and T. Rowe Price Associates, as well as other existing investors.
This series E is a big success for the company: in its previous campaign in July 2018, the company was valued at $ 1.4 billion – partly thanks to the strong growth of the company. Although Toast does not disclose either its sales figure or its still profitable, Toast currently serves tens of thousands of businesses, ranging from independent venues to smaller channels, and has totaled tens of billions of dollars in transactions, according to CFO Tim Barash.
The catering sector represents a great opportunity for e-commerce companies, but there have been notable difficulties for which ambitions have not met with success. Groupon, which has spent several years acquiring and organically developing a point-of-sale and restaurant management company, first drastically reduced its operations and then stopped and sold its efforts, called Breadcrumb, in 2016. Amazon has also pulled out of point-of-sale services (aims more than just restaurants) and has also, in some areas, reduced its catering efforts, such as its order management platform and delivery.
Barash said in an interview that he thought the reason why Toast Since then, a large proportion of her own employees – around 70% – have worked in the restaurant business.
"I was first a bus boy, then I worked in pizza delivery for years," he said. "Seventy percent of our employees have worked in restaurants, including our product leadership, which helps us understand the problem."
Restaurants, as Barash points out, are complicated. "They are essentially manufacturers and retailers at the same time, all in a small physical footprint." The key to creating products for them is understanding that and understanding the challenges they face in creating and managing these businesses.
And before considering the many other factors that can make restaurants a dice game, ranging from changing tastes of cooking to changing dietary habits (most foods are delivered today) to the precariousness of the commercial real estate market, etc.
Toast aims to create tools for applying data science and orderly computer processes to address one of the variables that can be controlled by the restaurant.
Today, Toast's products include point-of-sale services, as well as reports and badysis; display systems for kitchens; online ordering and delivery interfaces; and loyalty programs. He also builds his own hardware, which includes portable order blocks, payment and order terminals, self-service kiosks and guest displays. It also offers links to a network of one hundred partners, such as Grubhub, which offers takeaway, when a restaurant does not cover these services or does not work directly, to help group together services to work on its platform.
Tomorrow, the plan is to use the funds to improve those with more advanced features that address some of the bigger issues and concerns, said Barash, whom his clients are expressing today.
This will include better services, more numerous, focused on the commitment and retention of customers; better ways to recruit and retain employees in an industry with high turnover; and of course, more tools to evaluate the efficiency of a business to make it more profitable. The company has spent about $ 1 billion over the next five years on research and development to create more hardware and software.
Having access to this type of technology and platform is a big problem, especially for independent institutions hoping to compete with larger chains without having to compromise on their core competency: prepare unique and delicious foods .
In the meantime, Barash said that if Toast himself was no stranger to the moves of the bigger players himself – he refused to spell out who had said long-term vision is to grow and stay his own boss.
This is an ambition that has seduced avid business investors for high growth companies.
"At TCV, we invest in companies that can transform entire industries. By providing restaurants of all sizes with access to innovative technology, Toast is leveling the playing field and driving the industry's transition to the cloud, "said David Yuan, General Partner of TCV, who joins the board with tower. "Our investment will enable Toast to extend its platform beyond point-of-sale and customer technologies, creating a powerful SaaS platform with an unparalleled business model." We are excited to partner with Toast to accelerate the growth of the community they serve. "
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