It's IPO season again.
We won't call it hot liquidity, but we are back to the public-offering cycle after an August lull. Last week, we received filings from Freshworks, Toast and Warby Parker. We've already looked into Warby. We'll be focusing on the details of these two debuts this week, starting with Toast.
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What is Toast all about? It's a technology startup. Its a unicorn. Crunchbase data shows that it raised over $900 million privately. The company is also a major contributor to the Boston startup scene.
Even more, the software-and-payments company combines subscription incomes, transaction fees, hardware revenues and lending earnings. The business model is well-structured and can help us understand how software companies build financial capabilities into their applications.
This is a fascinating company that was initially affected by the COVID-19 pandemic. Let's look at the company's financial performance and examine how COVID impacted its business. We will also discuss how the company's revenue mix has changed over time. Finally, we will discuss the importance of fintech incomes for the company, as well as what they might be worth. It will be a lot of fun. Let's get started!
Toasts growth is increasing
We will soon be looking into the ways in which the company generates revenue. Keep in mind, however, that there are a variety of revenue streams within the company, with each having a different gross margin profile. We are not just talking about high-margin software revenue in the next.
Heres Toasts top line performance for 2019, 2020, as well as the first half of 2020 and 2021 taken from its S-1 file:
It is easy to see that the company grew between 2019 and 2020, but at a slow pace. We can also see the rapid growth of the company by looking at the columns to the right. Comparatively, Toast grew by 24% in 2020 and 105% during the first half 2021.
When you think about COVID-19's impact on the food industry, modest growth at Toast in 2020 seems quite strong. Despite huge market chops, Toast still grew well. The H1 2021 results show that Toast's product work during the global pandemic was a success, which allowed it to grow by four times in the past two quarters compared to the overall rate of revenue growth in 2020.
This data helps us understand why Toast is now going public. The company's current picture is one of rapid growth that leads to huge top-line accretion. Toast is more than just strong. There's no better time than now to make your numbers public.
