Toast, Mailchimp, and GitLab Make Waves in the Startup Space
Isadora Teich wrote this article
In the world of startups, anything can happen.
Sometimes, companies with the humblest beginnings can become some of the biggest in the world. In this post, we take a look at some unprecedented things happening with startups and the companies famous for empowering them.
Toast Moves Toward an IPO
This year, seemingly countless businesses and startups have either started the process or successfully created IPOs across diverse industries. This includes crypto exchange platform Coinbase and mobile technology company AppLovin.
Cloud-based restaurant tech startup Toast is working on going public currently and TechCrunch reviewed their S-1 filing.
Of course, with the pandemic still ongoing, this is a tumultuous time to be in most businesses, but especially in the restaurant industry. The numbers give a fascinating insight into how Toast has continued to succeed.
Toast is a Boston-based startup that is considered a unicorn. It raised more than $900 million as a private company. The software and payments company combines subscription incomes, hardware revenues, transaction fees, and lending earnings. It is a complicated model that is doing very well for them. Even in 2020, a year that took out many in the restaurant industry, they maintained growth.
They grew 24% in 2020, and 105% in 2021 so far.
Via their initial IPO, Toast is hoping to raise $100 million. The Wall Street Journal predicted earlier this year that their valuation could hit $20 billion.
Where Toast Has Been and Where They’re Going
The Boston-based startup Toast was founded in 2012 by Steve Fredette, Aman Narang, and Jonathan Grimm. Their most well-known revenue stream is providing point of service software for restaurants and bars to streamline the payment process.
Over the last year, nearly 50,000 businesses have used their services.
Pre-pandemic, in 2020, Toast was valued at $5 billion. Then, after the pandemic forced mass restaurant closures, Toast had to fire almost half of their employees. In response, they also launched a suite of contactless payment solutions.
Our competitor Toast laid off half its staff last year. Then its valuation grew from $5 billion to $8B.
It just went public at $32B, making its investors billionaires and ex-staff $0.
We laid off 0 people, gave raises and have 0 investors. Prioritieshttps://t.co/kOJooOqOmF
— Dan Price (@DanPriceSeattle) September 22, 2021
According to their SEC regulatory filing, they are seeking an initial public valuation of $16 billion, shares will be priced between $30-$33, and they will trade on the NYSE under the symbol TOST.
Toast’s founders said in a letter:
“This is only the beginning of our journey. Our goal to become the platform of choice for restaurants all over the world is broad and could take us in many directions. To build a leading technology company, we’ll invest in the long-term drivers of the restaurant industry.”
Intuit Buys Mailchimp
Mailchimp is one of the biggest marketing automation and email marketing companies for small businesses out there. Founded in 2001, it grew to a company that earned $700 million in revenue in 2019. Intuit buying Mailchimp is huge for a few reasons. For one, it is one of the largest recent tech deals.
As of 2019, Intuit, a company most famous for its TurboTax software, had made just one billion dollar deal in its almost 40-year history. Since then, it has bought both Credit Karma for $8.1 billion and Mailchimp for a whopping $12 billion.
Something to keep in mind is that many people would consider this a shocking move due to Intuit’s own market cap. It has grown into a software company worth $155 billion.
This led TechCrunch to ask the question:
Why is Intuit spending 10% of its market capitalization to buy an email marketing company?
Intuit says that they are looking to become a sort of all-in-one center for small business growth in the market.
Despite the almost unprecedented acquisition for Intuit, this is something completely unprecedented for Mailchimp, a famously bootstrapped company. This means that unlike many startups, which seek investments from outsiders to get started, Mailchimp did not.Mailchimp has gone from a company that started small with no outside capital to a large steadily profitable company, to one that was just acquired for $12 billion. Click To Tweet
GitLab’s Fascinating Story
When it comes to discussions of startups and companies doing big things right now, GitLab absolutely has to be mentioned.
This Ukrainian startup was founded in 2011 in a house with no running water. In its early days, it survived only due to Bitcoin speculation.
GitLab chief executive Sid Sijbrandij told Sifted:
“I rode Bitcoin in the first wave from $50 to $850 and that provided the initial about $100,000 investment to bootstrap GitLab as a company.”
Today, GitLab is valued at $6 billion, on the way to a US IPO, and is possibly the largest all-remote company in the world. It is a coding platform backed by ICONIQ Capital and Khosla Ventures. They will trade under the ticker GTLB.
GitLab offers online tools to reduce the software development cycle by empowering teams to collaborate more smoothly. They already boast an impressive roster of clients including Nvidia, Siemens AG, and Goldman Sachs. They have a workforce of over 1300 people working remotely in more than 65 countries.
Over the last few years, their valuation has surged. They have also raised over $400 million in capital from large investors like Altimeter Capital, Franklin Templeton, and TCV after starting as an open-source project founded on the idea of radical transparency.
Radical transparency and self-management are core values at GitLab. They have a very unique culture and interesting style of management. When questioned about how they manage such a large remote team, Sijbrandij said:
“We measure the results people achieve and don’t measure how long you work to achieve them. Managers are not allowed to talk about your hours, unless they suspect you’re working too long and then that’s a concern, but we don’t monitor how long people work.”
He says they aim to hire self-motivated “managers of one.”
The GitLab story shows the multiple paths to winning in software that 10 years ago few believed. You can build massive value around open source. Your biggest competitor can get acquired by a major player, and the market still grows massively. You can be 100% remote. And so on.
— Aaron Levie (@levie) October 14, 2021
There are always so many exciting things happening in the world of tech, business, and startups.
Here we have three very different B2B businesses achieving different and impressive things. It’s fascinating and inspirational to explore how the smallest companies can evolve over time and become worth billions.
There are so many roads to success. Success itself can mean a wide variety of things.
What do you think? Comment below.
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