Latest Acquia News
Sep 22, 2021
Toast’s three co-founders previously worked together at Endeca, which Oracle acquired in 2011 for $1 billion. After Toast’s market cap topped $30 billion at its debut on Wednesday, each of the founders has shares worth more than $1 billion. They join a long and growing roster of tech founders to join the three-comma club in 2021. - Advertisement - Toast’s $30 billion increase in market cap in its stock market debut on Wednesday turned all three of its co-founders into billionaires. - Advertisement - Steve Fredett, Aman Narang and Jonathan Grimm started the company in 2012 after their former employer Andeka was sold to Oracle for $1 billion. They stayed at home in Cambridge, Massachusetts, where Andeca was located, and built their restaurant hardware and software systems by testing products at local bars, restaurants and cafes. Toast’s chairman Fredette holds 33.2 million shares for a $2.1 billion stake as of Wednesday’s expiration. Grimm, the company’s chief technology officer, controls 26.8 million shares worth $1.7 billion, while chief operating officer Narang holds 24.6 million shares for a stake valued at more than $1.5 billion. - Advertisement - The three founders and other insiders are banned from selling stock for 180 days as part of the lock-up agreement, so by the time they can start cashing out, the value of their bets will increase dramatically. or go down. But based on the stock’s first price on Wednesday, the trio joins a growing list of tech executives and founders who are seeing their net worth rise during a booming year for IPOs and expanding technical valuations. The founders of Coinbase, UiPath, Roblox, and Robinhood are among others to join the three-comma club in 2021. At least 19 tech companies that went public this year are now worth at least $10 billion, according to FactSet. Full circle for mobile payments Toast’s initial product about a decade ago focused on mobile payments, allowing consumers to pay for food from their devices. However, point-of-sale systems in restaurants at the time made integration difficult, if not impossible. To make real progress in an industry with low margins and tight budgets, Toast decided that the entire technology stack needed to be revamped, including all the hardware and software that restaurants use to manage their operations. The founders sought more experienced help from their Andeca network by hiring Chris Comperato as CEO. He was previously an Executive Vice President at Andeca, and then went on to drive customer success at Acquia for more than two years. Compareto’s stake in Toast increased to more than $700 million on Wednesday. By the time Compreto got involved, Toast had made an important decision that seemed risky at the time but proved important in the long run. Some payment start-ups were using iPads as their business cash registers, but Toast chose to build on Android, even though the technology was clearly lacking. “Initially, iOS was the better platform,” Fredett said in an interview with the New York Stock Exchange on Wednesday. “The equipment was more expensive and of a higher class.” But as for the iPad’s look and feel, Toast recognized a number of potential problems when it followed the Apple route. Most importantly, Apple’s system is locked down – it owns all the hardware and software. As a third party developer, the best would be to make Toast a killer app. Android’s technology, though plagued by buggy software and frequent updates, was all open source. This meant Toast could design its own hardware and delve deeper into software, first using a core operating system that Google had generated, but no one really controlled. This gave Toast immense flexibility to meet the demands of the customers. “As we got bigger over time, we could go straight to manufacturers to create whatever we needed for the industry,” Fredett said. The company’s offering, which includes a complete point of sale terminal, handheld devices for waitstaff and mobile ordering and payment software used by consumers, is now deployed by 29,000 customers in 48,000 restaurant locations. Over the past year, consumers have become much more familiar with Toast—for reasons the founders never could have predicted. Covid-19 initially affected the business, which is almost entirely dependent on a thriving dine-out industry. But as restaurants grappled with pandemic restrictions and tried to find ways to meet consumer demand for takeout options and contactless ordering, Toast showed up with a suite of options that most upscale eateries never had. was believed. One of the most popular products is mobile ordering, which consumers use to avoid physical menus from their devices and make payments automatically without waiting for a check. This is exactly what the company wanted to do eight years ago, when the technology was not ready. “We certainly see this as something that has come full circle,” Narang said on Wednesday. “It’s amazing to see some growth.” Watch: Toast goes public at $20 billion valuation .