If you've ever paid for coffee with your card at a cafe, you have either interacted with either Toast or LevelUp—two Boston firms that sell management software to restaurants. The competition between the two companies has now moved to consumers' smartphone.
Toast, which became a unicorn after closing a $115 million Series D round last summer, has now launched a consumer-facing app: The Toast TakeOut app allows diners of restaurants in the Toast network to order ahead and pick up their food in store.
Launched on Tuesday, the Toast TakeOut app will initially be available only for Apple devices, and no, it won't deliver food just yet. LevelUp, now owned by Grubhub, already has a similar app.
"As we look at... what Starbucks has done with their app, we also see the growth of takeout as a trend and on opportunity," said Aman Narang, who co-founded Toast with fellow MIT graduates Steve Fredette and Jonathan Grimm.
With the mobile order-ahead market estimated to be worth $55 billion in the next five years, it’s no surprise that many restaurants and coffee shops are offering the "skip the line” feature. Panera Bread first rolled out its order-ahead service in 2012. Currently, one of the most successful mobile payments platforms in the U.S. is Starbucks, where mobile payments represented 30 percent of the company's total transactions in 2017; The ‘Starbucks Delivers’ pilot is coming to Boston soon.
Restaurants that will fulfill mobile orders through Toast TakeOut are, among others, Fenway's seafood and oysters place Eventide, Flour Bakery Cafe, Greek restaurant Saloniki and B.GOOD. Toast said it has more than 210 restaurant partners in the Boston area.
Orders placed through the Toast app go directly into the restaurant's point of sale. For Narang, the Toast app is complementary to the custom app that many restaurants already have in place, like the B.GOOD’s Family App; occasional customers might start placing orders on the Toast app and then transition to the restaurant's own app when they become loyal customers. "That's actually a good outcome from our perspective," Narang said.
For diners, there's no extra fee associated with using Toast TakeOut; restaurants pay a 3.5% (plus 15 cents) processing fee on orders placed through the app.
"If you look at our history, we started the company in 2012 as a consumer app," Narang pointed out. "We had built an iOS application at Firebrand Saints in Kendall Square to make it easy to pay... at restaurants: That was the beginning of Toast."
