For more crisp and insightful business and economic news, subscribe to The Daily Upside newsletter. It's completely free and we guarantee you'll learn something new every day.
Technology investors are having their cake and eating it too.
Shares of Toast — which provides payment systems and software for the restaurant industry — popped 56% on Wednesday after a triumphant IPO. Freshworks — which sells customer service software — closed up 32% after its impressive IPO.
After a one day hiatus earlier this week, the risk-on trade is back.
A Silicon Valley Techie Earns His Extra Commas
Toast had a year to remember in 2020. With a $5 billion valuation heading into the pandemic, the company was riding high as just a seven year old company. Then the pandemic hit, the outlook for restaurants became as grim as it's ever been, and Toast quickly laid off nearly half its employees and furloughed another 12%.
But like many great digital-first companies during the pandemic, quick pivots saved the day:
- Toast rolled-out offerings like "contactless Order & Pay for indoor dining, curbside notifications for takeout, and flat-fee delivery via Toast Delivery Service."
- The nimble playbook was a big part of the reason that recurring revenue surged 118% in the second quarter.
Fresh Story: Freshworks had a similarly exciting pandemic-era. The company saw technology that assists companies who previously operated with pencil and paper needing to quickly pivot to digital.
Are These Companies Profitable? That's a no. A large and emphatic no. Toast reported a net loss of $235 million on just over $700 million in revenue in the first half of 2021.
Life is easy when you have a bevy of VC investors to keep you afloat.