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Pair of Saas companies bump price guidance ahead of IPOs

By Kevin Donovan

15:02, 21 September 2021

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Bull sculpture at Bowling Green Park - Photo: Shutterstock

Freshworks and Toast, a pair of software-as-a-service businesses, increased the price guidance for their planned initial share offerings, according to records filed with the US Securities and Exchange Commission.

Both are expected to finalise their share price after market close Tuesday. The two offerings could total roughly $27.5bn (£20.1bn) combined.

Boston-based Toast is offering 21.7 million shares at new price guidance set at $34 to $36 per share, with a goal of raising $900m. The new price guidance is up from guidance set at $30 to $33 per share on 13 September.

Restaurant platform

The higher end of price guidance would value the restaurant-focussed fintech at $18bn. Trading is scheduled to begin on the New York Stock Exchange Wednesday under the ticker TOST.

Goldman Sachs, JPMorgan Securities and Morgan Stanley are acting as joint-lead managers. KeyBanc Capital Markets, William Blair and Piper Sandler are co-managers. Canaccord Genuity, Needham and Co. and R. Seelaus and Co. are in the selling group.

Toast is a cloud-based, end-to-end technology platform purpose-built for the restaurant community, the company reported in its amended S-1 shelf filing.

Toast totals

As of 30 June, approximately 48,000 restaurant locations processed over $38bn of gross payment volume in the trailing 12 months, worked with Toast to optimise operations, increase sales, engage guests, and maintain happy employees.

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Toast revenue totalled $823m in the full year 2020 and $704m through the first half 2021. The company lost $248m through year-end 2020 and has lost $125m through the first half of 2021.

Freshworks

San Mateo, California-based Freshworks is offering 31.3 million shares at new guidance set at $32 to $34 per share to raise $1.06bn. This is up from the previous guidance of $28 to $32 per share set on 13 Sept.

The high end of price guidance would value Freshworks at roughly $9.5bn. Shares for the IT management company are expected to begin trading on the Nasdaq exchange Wednesday under the ticker FRSH.

BofA Securities, JPMorgan Securities and Morgan Stanley are acting as joint-lead managers. Barclays Capitaland Jefferies are acting as co-managers.

Freshworks lost $56m in 2020 on $249m in revenue and has lost $8.2m through the first half of 2021 on $168.9m in revenue.

 

Read more: Car parts retailer AutoZone’s Q4 earnings beat estimates

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