Toast, the fast-growing restaurant technology company, has just been served a heaping portion of venture capital to continue expanding.
On Tuesday, the Boston-based company announced a $101 million investment led by new backers Generation Investment Management—whose co-founder and chairman is former Vice President Al Gore—and Lead Edge Capital. Bessemer Venture Partners and other earlier Toast investors also contributed to the latest investment.
To date, Toast has raised around $133.5 million from investors, says CEO Chris Comparato. He declined to disclose whether the new capital is in the form of equity, debt financing, or a mix of securities.
Toast was founded in 2011 by three Endeca alumni: Steve Fredette, Aman Narang, and Jonathan Grimm. Comparato, another Endeca veteran, became CEO in early 2015, according to LinkedIn. (The four are pictured above, left to right: Fredette, Comparato, Narang and Grimm.)
Toast started as a mobile payments app for restaurants, but it now offers mobile, cloud-based software that can perform a range of tasks. Those include executing payments in the restaurant, either through computers at the counter or right at the table with handheld tablets. Toast’s software can also handle online orders, manage customer rewards programs, and track things such as sales, customer ordering data, food inventory, and hours worked by staff.
“The restaurant industry has historically been slower than others to adopt technology, leading to operational inefficiencies and missed opportunities,” says Greg Wasserman, partner at Generation Investment Management, in a prepared statement. “Advances in hardware, software, and cloud computing are shifting that dynamic.”
Comparato argues that this technology transformation in the restaurant industry is still in its “infancy.” His company and its investors obviously think Toast can be a leader in enabling that shift.
Other companies working on software for restaurants and bars include Providence, RI-based Upserve (formerly called Swipely) and Boston-based BevSpot.
It’s hard to tell how well Toast is doing financially. The company said it had more than 1,000 customers in early 2016, when it raised a $30 million Series B round. Comparato says Toast has signed up a lot more restaurants since then, but he declined to give specific numbers or share other financial details.
“We’ve seen fantastic momentum,” Comparato says.
Now, with the new funding, Toast wants to throw gasoline on the fire. It will invest in sales and marketing, product research and development, and improving the experience for its customers, Comparato says.
The company is hiring aggressively to pursue its plan. It currently has nearly 600 employees, and it plans to hire another 1,000 or so in the next 18 months, Comparato says. Those new hires span every part of the business, including putting more sales and customer service workers out in the field to work closely with customers. “We like the in-person relationship in markets where we can build that out,” he says.
Comparato says one focus in product development is digital ordering. That includes orders placed online, as well as self-service ordering kiosks located inside restaurants. The kiosks are meant to reduce wait times—which can be especially useful during the lunch rush, for example—and free up restaurant staff to focus on tasks other than taking orders, Toast says on its website.
Data analytics is another key investment area for Toast, Comparato says. “As restaurant operators become more efficient with cloud platforms and have more access to real-time data, their ingestion of data is going to pick up at a pretty good pace,” he says. “What type of information could you put in front of them to [help them] make more effective decisions?”
