IPO Du Jour: Toast

We'll open this week's round-up by looking at a company I wasn't too familiar with until it went public this week. That company is Toast, and it's got software that helps run restaurants. Sounds kind of boring, but!

In addition to managing restaurants, Toast is also competing with companies like Seamless with its Toast Takeout app.

Unlike other IPOs I've covered in the newsletter recently, Toast's shares rallied on Wednesday, growing 50% over the IPO price of $40, which was already higher than the $34 price the market was expecting.

Let's see if the app had anything to do with it.

Looking at our download estimates, I think the answer is yes.

Pre-pandemic, Toast Takeout had about 2K downloads every week. That number peaked around October of 2019 to 5K but dropped right after. Then lockdowns started, and with those the demand for food ordering apps grew almost immediately.

Toast's weekly downloads rose to 25K in April, and even though they dropped since, the trend over the last year has been very positive. Last week Toast saw 18K downloads.

It's worth noting that other apps in the same segment saw a similar up and down, albeit at higher numbers.

So far in 2021, Toast has seen almost twice the downloads of Seamless, with more than 567K downloads in the U.S., according to our estimates.

There's a twist, though. You'll notice I'm comparing Toast to Seamless and not the more popular Uber Eats and DoorDash. That's because Toast doesn't handle deliveries but rather just ordering. Much like Seamless. So, it's not really a competitor to those companies yet, but it does something they don't -- it's fully integrated into their system, which Toast also owns. That's where the value is, in my opinion.

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