Toast and Freshwork shares gain in market debut as IPO activity picks up
and alias Brands Holding made their public market debut on Wednesday as IPO market action resumed after the summer lull.
More than a dozen companies are expected to open their doors this week. Toast and Freshworks both raised more money than expected, while AKA Brands priced its initial public offering at the lower end of the range it had asked investors to expect.
Toast shares (ticker: TOST) started Wednesday at $ 65.26 and hit a high of $ 65.99. The stock closed at $ 62.51, up more than 56% from its offer price.
The strong debut came after Toast raised nearly $ 870 million, selling 21,739,131 shares at $ 40 each on Tuesday night. Boston-based fintech initially filed to sell 21,739,131 shares at $ 30 to $ 33 each, which it increased from $ 34 to $ 36 each on Monday.
Goldman Sachs & Co,
and JP Morgan are the main bookkeepers in the transaction.
Toast provides point of sale software that helps restaurants and bars process payments and streamline orders. About 48,000 restaurants have used Toast’s software to process more than $ 38 billion in gross payment volume in the past 12 months, according to the deal prospectus.
âI am incredibly thrilled with the journey ahead of Toast. Today is just the start, âsaid Toast CFO Elena Gomez. Barron.
Restaurants have always lagged behind in adopting technology, Gomez said. That changed with the Covid-19 pandemic, which caused the closure of businesses across the country in 2020. â[The pandemic] was the linchpin that saw restaurants embrace the technology, âGomez said. Toast, in response, launched a suite of contactless payment solutions, including Order & Pay, which allows customers to browse a restaurant’s menu and order without the help of a waiter. The software allows servers to focus more on the dining experience and manage more tables.
Before the pandemic, nine servers typically serviced 90 customers, Gomez said. Now, with the help of Toast’s technology, “you have 8 servers serving over 200 diners,” she said.
âContactless service was really essential for restaurants,â she said.
FinTech has raised more than $ 860 million in funding, Gomez said. Tiger Global Management, a frequent technology investor, will have a vote of nearly 13%, while venture capital firm Bessemer Venture Partners will hold 12.42%, according to the prospectus.
Aka Brands (AKA) shares have never traded above its offer price of $ 11. The stock opened at $ 9.50, peaked at $ 10.88, and closed at $ 9.99, down more than 9% from its IPO price. This makes AKA Brands a so-called broken deal in that it didn’t result in the first gains that many IPOs offer.
San Francisco-based aka raised $ 110 million after selling 10 million shares at $ 11 each. The company had originally filed to offer 13.9 million shares at $ 17 to $ 19, which it reduced on Tuesday to 10 million shares at $ 11 to $ 13.
and Jefferies are the principal bookkeepers in the business.
Founded in 2018, aka acquires fashion brands that cater to millennials and Gen Z consumers who are inspired by social media fashion. These consumers also shop primarily online and using mobile devices.
Freshworks (FRSH) was the last of the trio to open. The shares launched at $ 43.50, peaked at $ 48.75 and ended at $ 47.55, up more than 32% from the offer price.
Freshworks had a strong performance after raising $ 1 billion on Tuesday night, selling 28.5 million shares at $ 36 each. Freshworks had originally planned to offer 28.5 million shares at $ 28 to $ 32 each, but increased that figure to $ 32 to $ 34 per share on Monday.
Morgan Stanley, JP Morgan and BofA Securities are the main underwriters of the transaction.
Launched in Chennai in 2010, Freshworks is the first India-based software as a service company to go public on a US stock exchange, said CFO Tyler Sloat.
âWe are trying to be an example for the larger SaaS companies out there,â Sloat said. Barron. âIt’s more than just an IPO, we have the ability to build a real commodity business from India. There is such a large pool of incredibly technical talent.
Freshworks offers software that helps businesses interact with their customers. The software also helps automate routine and repetitive tasks, such as sending welcome emails and setting follow-up reminders for executives. The San Mateo, Calif., Company has raised $ 484 million in funding, according to Crunchbase. Tiger Global will have a vote of almost 26%, while venture capital firm Accel will have more than 25%, according to the prospectus for the deal.
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