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As Toast IPO rumor swirls, restaurant owners express support for the tech firm

After a pandemic year, the software company could be valued at $20 billion

Aman Narang and Steve Fredette are two of the cofounders of Toast, a Boston startup that has designed a new kind of cash register and order-taking system for restaurants.

Toast, a restaurant-management software company in Boston, is rumored to be contemplating an initial public offering this year that could value the business at $20 billion, as first reported by The Wall Street Journal.

The decade-old company sells cloud-based technology used by restaurants to manage orders, payrolls, and marketing, among other operations. Founded in 2011 by Aman Narang, Jon Grimm, and Steve Fredette, Toast has been one of the city’s up-and-coming tech stars. A year ago, it completed a $400 million funding round, bringing its valuation to $4.9 billion. But that momentum stalled as the pandemic led to a swift shutdown of restaurants, leading to a revenue decline of more than 80 percent in March. Toast then laid off 1,300 workers, half its workforce, in April.


In the months since, the company has retooled, rolling out new software to help restaurants pivot to takeout service and curbside deliveries, offering webinars to help support small-business owners, and providing over $40 million in software relief and access to capital loans for its customers.

Last fall, the company offered a secondary sale of its shares that allowed current and former employees to sell up to 25 percent of their vested shares for $75 apiece, which drove the valuation of the company up to $8 billion. Now, according to The Wall Street Journal report, the company has tapped Goldman Sachs and JPMorgan Chase to underwrite a potential IPO.

Toast declined to comment on the IPO rumors, saying it doesn’t discuss “speculated financial transactions.” But it issued a statement: “We remain laser-focused on supporting the restaurant industry as it moves toward recovery from the COVID-19 health crisis and furthering our mission to empower the restaurant community to delight guests, do what they love, and thrive.”

To local restaurant owners who have worked with the company, the idea that a Boston business that has long supported them would succeed was met with enthusiasm.


Jefferson Macklin, who owns Bar Mezzana, Black Lamb, and Shore Leave in the South End, first connected with one of Toast’s cofounders, Aman Narang, when the company was still just an idea. They met over cocktails at Drink, where Macklin oversaw the bar as part of his role as chief operating officer of Barbara Lynch Gruppo. At the time, Macklin recalled, point-of-sale systems for restaurants were wonky and largely dysfunctional, so the concept of creating a cloud-based system that responded to what restaurateurs needed was revelatory.

“I think the world of them — they have consistently listened to restaurateurs and come up with a great product,” Macklin said.

He added that Toast used the feedback from its Boston-area clients to help innovate and enhance its products, and has been consistently supportive of local businesses throughout the pandemic, often waiving its monthly fees during the early months, when businesses were forced to close.

“They definitely sent out a lot of $0 invoices to people like us,” Macklin said. They understood the pain the industry was in and worked hard to soften the blow.”

The IPO speculation follows the news earlier this month that Drizly, another Boston company in the food and beverage space, would be acquired by Uber. A hub of food- and hospitality-related tech players, many of which feed off of each other, has emerged in the city. And while some speculate that there are so many point-of-sale systems on the market that a $20 billion valuation for Toast might be a tad overwrought, an IPO would only seem to further that growth in the city.


Globe correspondent Scott Kirsner contributed to this report.

Janelle Nanos can be reached at Follow her @janellenanos.