If you're building a business platform only using the Android operating system, it's probably a good sign when one of Android's co-founders leads a new round of funding to help your company grow.
"We want to be one of the next sustainable technology companies anchored in Boston."
This is the kind of validation that Toast just received. The Boston-based restaurant software startup announced Tuesday that it has raised a $30 million Series B round led by Bessemer Venture Partners, with participation from GV, the venture arm of Mountain View, Calif.-based Alphabet that was previously known as Google Ventures. The person who led GV's investment is general partner and Android co-founder Rich Miner. (A handful of undisclosed investors also participated in the deal.)
Toast plans to use the new funding to hire more people, continue product development and continue creating success stories for its customers, which are now spread across 43 states. The startup currently employs 170 people across the country—most of them working in 37,000 square feet of space at Hatch Fenway's co-working space—and Toast CEO Chis Comparato estimates that number will reach north of 300 by the end of the year. To give you an idea of how fast the team has been growing, consider this: the startup only had about 15 employees at the beginning of 2014.
"We want to be one of the next sustainable technology companies anchored in Boston" with a more than $1 billion valuation, Comparato told BostInno.
In other words, Toast has unicorn ambitions. The startup isn't there yet, but Comparato said he's happy with the startup's current valuation, which he declined to disclose.
Toast originally started as an mobile payments app for restaurants, but it has since blossomed into a full restaurant technology platform, providing various solutions such as point-of-sales systems, online ordering, gift card serving, business analytics, customer loyalty programs and more.
The startup was co-founded by Steve Fredette, Aman Narang and Jonathan Grimm, who all met while working at Endecca, a Cambridge-based software company that was acquired by Oracle.
When Toast pitched to investors for this round, Comparato said there were a few important things that stood out to them.
The first thing, Comparato said, is Toast's focus on building a strong team. With the startup expected to hire more than 100 people this year, he said Toast wants to make sure it isn't able to just retain employees over time. More important, he said, is the ability to help them "grow into their next roles that is necessary for their careers and our growth."
"Our new investors appreciate the fact that we want to build a market leader within a single vertical."
Comparato said another thing that made Toast stand out to investors is its investment in research and development and the strength of its product. Besides hiring more people and sales, marketing and customer service, he said Toast also plans to make a big hiring push for research and development this year.
Toast's singular focus on the restaurant industry was also seen as a strength, Comparato said. "Our new investors appreciate the fact that we want to build a market leader within a single vertical," he said. "We don’t want to branch beyond the restaurant space."
The other major factor, Comparato said, is Toast's "strong track record of customer success." The startup has gained 1,500 customers since launching more than two years ago, and he said investors talked with some of those customers to get an idea of how Toast is helping their bottom line.
“Above all, we love Toast’s obsessive focus on making their customers delighted," said Kent Bennett, general partner at Bessemer, in a statement. "Building great software is hard, but building an organization that makes sure software users are successful is even harder, and that’s the constant focus of the Toast team.”
