Venture Capital: Toast Valued At $8B In Secondary Share Offering By Employees
Vested shares held by employees sold at $75 each.
Toast, which makes software for restaurants, has rebounded from the pandemic like a phoenix. Consider this: In February, shortly before the pandemic, the start-up raised $ 400 million at a valuation of $ 4.9 billion. After the virus, in April, Toast faced up to the economic devastation and cut its workforce by 50% through layoffs and furloughs. It also was forced to cut executive pay, freeze hiring, and halt bonuses. However, the startup’s software for takeout orders enabled in-house dining restaurants to pivot to the alternative mode of service. Result: business is good again. (CNBC)
Toast valued at $8 billion
In a nutshell, despite the ravages from the virus pandemic, Toast managed to hike its valuation from nearly $ 5 billion in February to $ 8 billion in November.
With business now booming, Toast did not forget its employees. It allowed them to encash some of their shareholdings by selling up to 25% of their vested shares for $ 75 each in a secondary sale.
People with knowledge of the matter told CNBC that the secondary offer was for 800,000 shares worth about $ 60 million.
“In order to support our employees and former employees as they navigate the impact of Covid-19, we did complete a secondary offering recently,” a company spokesman confirmed to CNBC, though he refused to reveal the identity of the buyer(s) or the valuation.
A sea change in Toast’s fortunes
According to CNBC, recent bids in the secondary market have valued Toast significantly above this $ 8 billion valuation.
The company also rehired many of the personnel it had laid off earlier.
Meanwhile, the market considers the start-up as a candidate for an IPO in 2021.
Related Story: Restaurant Software Maker Toast Raises $400 Million
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