There is no shortage of players racing for dominance in the mobile point of sale game in the United States. Well-known players on the list include Square, Stripe and Clover — but there are quite literally hundreds of others. And though the marketplace is more saturated today than it ever has been, when Toast launched in late 2011 it was already getting very crowded and competitive.
But Toast has always been a little different.
Employees proudly refer to themselves as “Toasters” and though they are a high-tech firm, they brainstorm on the oldest school piece of of equipment imaginable in their Boston-based headquarters: a blackboard. The world they launched into saw everyone who was anyone (or suspected to become someone someday) designing for the iPad and iOS — Toast on the other hand is Android-based.
Toast’s most distinctive feature, however, is that the company has never made an explicit goal of being the go-to solution for all SMBs everywhere. The firm has avoided that particular exercise in cat-herding in favor of a narrow focus on a single (albeit diverse) vertical: restaurants.
In fact, Ellie Mirman, Toast’s vice president of marketing, noted in an email exchange that the choice to use Android as the base of the platform grew directly from the fact that their chosen area of focus is so incredibly complicated and diverse.
“It became apparent that just given the breadth and depth of complexity that comes with serving restaurants, flexibility and customizability in both software and hardware [is key]," Mirman said. "This allows us to have better control over the tech experience as well as tailor the system to each restaurant’s needs.”
Toast has grown steadily since its founding and now serves over 1,400 restaurants in 43 states. And as the business’s physical footprint has grown, so has its menu of services. At launch, Toast was a pretty simple out-of-of the box concept: an Android-based mobile app that made it simple for eateries of all types to take card payments.
“However, it very quickly became apparent that our restaurant partners had needs that could be better addressed on mobile that far outstripped just receiving a payments — and so we adapted to that.”
That adaptation involved evolving into a full restaurant technology platform that included solutions for POS, online ordering, gift cards, loyalty systems and data analytics, among other features.
“Toast's POS platform was built specifically for the restaurant industry so that owners and operators can take advantage of cloud-based, mobile technology,” Mirman wrote. “Restaurant operations can be complex — whether it's integrating online orders with in-store orders, managing the kitchen prep workflow, or handling employee permissions — and Toast offers the depth of functionality to handle the complex restaurant environment.”
Building and perfecting the product to handle that complex environment has been the firm’s focus for the last two years, but now, comfortable that they have got the right ingredients to their secret sauce, so to speak, the firm’s focus is on growth and expansion.
And it's an effort that will no doubt be aided by the $30 million in Series B funding Toast announced yesterday, coming care of a round led by Bessemer Venture Partners and joined by GV (formerly Google Ventures), along with unnamed private investors.
“We have the opportunity to dramatically improve the restaurant experience through technology, and our customer traction to date shows the industry is ready for a new solution,” said CEO Chris Comparato in a statement.
The new funding brings the firm’s total up to $37 million — and the new funding will go toward improving add-ons (particularly online ordering) and strengthening its developer API.
The firm will also continue its staff expansion. Though there were only 15 Toasters to start with, there may be as many as 250 by the end of 2016.
Investment Tracker For The Week Ended 1-01-2016
It’s likely not a surprise to learn that the very last week of December – OK, semi week, with the dawn of the new year, saw very little in the way of investment activity.
After all, the holidays abounded and the world, at least the investment world, pretty much shut down for a bit. That stagnation was reflected in the week’s tally of $167.2 million in total fund movement, which also saw a more evenly split showing between FinTech and B2B designations, where previously FinTech had ruled the roost.
See below for the overall demarcations for the week that was.
But lest you think this skewed things a bit, consider the full month of December, with a bit more than $1.2 billion in activity, dominated by FinTech, with 85 percent of investments.
The investment activity in the week that ended Jan. 1 was itself weighted toward a few deals. The biggest? A Chinese eCommerce company, which, given the stock market rout that came just a few days later in that country, may figure as a brave new dawn of funding or last gasp. Huitongda has followed up a Series A funding round with $77 million from a series of backers, most notably Huaxia Life Insurance. The firm focuses on making inroads into rural areas within China.
The second largest deal came in the guise of Weijinsuo, which, based in Beijing, grabbed $46 million in a Series A round, with HNA Capital Group leading the consortium of investors. The alternative lending space has been a magnet for investor capital in months past, and of course only time will tell if the sector, particularly among P2P, will gather momentum or stall amid worries about slowing growth in the region.
The Top 5 deals from the most recent week are listed below: