Venture investors are still seeing some glimmers of hope in the market for small-business payments technology.
Boston-based Toast, a startup that supplies Android-based ordering and sales systems to restaurants, has raised a new round of $30 million to pay for a flood of hiring and continued product development.
The company has about 1,000 customers and employs some 170 people, with about 100 of those at its headquarters in Boston. Toast plans to hire another 150 people this year and expects to see its revenues continue to grow from the “double-digit” millions posted in 2015, CEO Chris Comparato said.
“This is sort of the exclamation point on a really busy year,” he said.
The investment round was led by Bessemer Venture Partners. GV, formerly known as Google Ventures, also invested in Toast through Rich Miner, the Android cofounder who is now a Cambridge-based investor at GV.
Entrepreneurs and investors have been betting that the mobile computing revolution would offer a big change in the way buyers and sellers handle money in brick-and-mortar establishments.
But adoption has been slow. Even Apple, the world’s most important tech company, has struggled to get large numbers of consumers using its iPhone-based cardless payment system.
The uncertain market for small-business payment tech was highlighted by the IPO for Square, a point-of-sale company headed by Twitter CEO Jack Dorsey. Square saw its shares jump in its first day of trading, but only after reducing its IPO price in the face of low demand from professional investors.
Comparato acknowledged a lot of “roadkill” among payment startups, but said Toast has been able to grow steadily because of a couple of advantages.
The company, founded in 2012, has focused solely on restaurants and not attempted to branch out into other small businesses. It also is aiming to be a flexible tech provider, allowing companies to use its software for cashing out checks, employee hours, online ordering, and more, while also integrating third-party software.
Toast makes money in several ways: by selling its Android-based hardware, by charging subscription fees for use of its software, and by processing payments on behalf of its clients. Comparato said the software-licensing portion is increasingly becoming a major part of that model.
“Quite often, we’re not just displacing legacy players in our space, but we’re also moving people over from pen and paper,” Comparato said. “And that’s a sign that the restaurant space is starting to move and adopt technology.”