Understanding Toast’s expected IPO through the lens of Olo’s 2020 results

Boston-based toast has been on a roller coaster for the past year. From raising $400 million in February 2020 to a valuation of about $5 billion, the company cut staff in March after turning the business of COVID-19 upside down. Toast recorded a 109% earnings increase in 2019. The difficulties of toast rarely ended. The company has made extensive recovery after this early-covid pruning. Evidence of this comes in the form of the company’s allegedly pending IPO and the fact that a valuation of $20 billion is possible.

It looks like every IPO today is exploding the final private valuation out of the water, but the climb from the cuts to Toast’s one-year-old IPO is an impressive transformation. In addition, if its price is flat at $5 billion. Any higher one is just a cream for one corner of the software. We will not know the full details until we get the S-1. That said, another company operating in a similar segment of the restaurant technology market is about to go public at the moment and we have S-1 filing: New York-based Olo. This morning, we look forward to the number of toasts that should be as exciting proof as Airbnb’s own COVID-19 recovery, to see the results of Olo to get a taste of the market that was tackled with Boston’s top startup in 2020.

Olo’s IPO

Olo is not an organization that has been very loud in recent years; The New York-based software company last raised capital in 2016 when it raised $40 million in a series D. Its business has three parts for its S-1 filing. First, Olo provides white-label ordering software. In addition, its service helps restaurants manage delivery options, which it calls “dispatch.” Finally, Olo’s software provides information about restaurants in a fashion similar to Yeast’s on online platforms. 

Toast, as a reminder, provides point-of-sale services, similar to Olo’s online ordering and delivery services. Significantly, Toast has recently expanded its software lineup by adding payroll management among other offers, including email-marketing tools. However, both companies earn software (SaaS) and customer (transaction-based services) from the restaurant space, so if one of them has the amount of 2020, it will probably swim like the other water.