The stock price of Boston tech company Toast jumped in its debut on the New York Stock Exchange.
Shares of the restaurant payments and software firm opened at $65.26 on Wednesday morning, 63 percent above the price set in its initial public offering. At the end of the day, the stock closed at $62.51, a 56 percent gain from the IPO price, giving the company a value of over $30 billion.
Wall Street underwriters sold 21.7 million shares of Toast on Tuesday night at $40 a share, which was already above the range of $34 to $36 that the company had anticipated a few days earlier. The huge pop represents buying by many investors who couldn’t get in on the IPO sale.
Toast raised $870 million in the deal, which it plans to use to expand its software and services for the restaurant industry. Toast sells handheld terminals and tablets that restaurants use to accept orders and take payments, as well as a suite of software for handling everything from taking online orders to organizing and paying staff.
“Restaurants are a massive industry,” cofounder and chief operating officer Aman Narang said in an interview. “We’re still in the early stages of where this could go... [Restaurants] are not technologists, but they have realized how important technology can be for them to run more efficient businesses.”
Toast’s business was initially crushed by the COVID-19 pandemic, as thousands of its customer restaurants were forced to close and it laid off half its workforce. But the company quickly created new products to help restaurants pivot and offer takeout and delivery. Toast’s revenue in the first half of 2021 more than doubled to $704 million from the same period in 2020, though its net loss also widened to $235 million, from $125 million a year earlier.
Toast’s market capitalization also makes all three of its cofounders — Narang, Stephen Fredette, and Jonathan Grimm — billionaires on paper, according to a filing with the Securities and Exchange Commission listing their stock holdings.
Toast’s valuation was the highest ever for a Massachusetts company going public via an IPO, exceeding the $10.7 billion market value of Internet company Genuity when it went public in 2000, according to data from Dealogic. And along with the stock market debut of Boston life sciences company Ginkgo Bioworks at a value around $20 billion, the Toast IPO marks a moment of broader strength in the Boston tech scene.
The strong first-day performance for Toast’s stock follows growing investor enthusiasm in stocks of the company’s rivals. The stock price of Square is up 71 percent over the past year, and Lightspeed Commerce gained 320 percent.