Restaurant-technology company Toast announced a new funding round on Monday, nearly doubling its private-market valuation in less than a year and underscoring a general enthusiasm for software-focused names in the payments space.
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A $250 million Series E funding round led by TCV values Toast at $2.7 billion, up from $1.4 billion as of July 2018. Investors from that round, including Tiger Global Management and several T. Rowe Price funds, joined this latest round as well.
Boston-based Toast makes point-of-sale systems for restaurants as well as back-of-house products focused on the dining experience, including online-ordering and marketing tools. Toast’s revenue grew 148% last year and the company serves tens of thousands of restaurants of varying sizes.
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“Restaurants are in a time of change after a period of very little change,” Chief Financial Officer Tim Barash told MarketWatch. In particular, he sees interest from restaurants in leveraging technology to improve the customer experience and retain employees.
Restaurant technology requires a delicate balance, however, since diners aren’t always inclined to mix screen time with meal time. Toast doesn’t make the sorts of on-table tablet ordering devices that can be found at some airports and chains, for example, deeming those to be “kind of in-your-face.” But Barash sees applications for hand-held payments devices that waiters can use to take credit-card payments right at the table, as well as dedicated self-ordering kiosks at the front of a fast-casual establishment.
Toast is going up against big-name competitors as it caters to restaurants, including both SQ, +1.87% and First Data Corp.’s FDC, +1.45% Clover, which have solutions designed for the dining landscape. Barash said that Toast plans to use some of the cash from its latest funding round to expand its team and accelerate research and development.
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The company has a “large direct sales and services team,” according to Barash, which helps get Toast’s products into the hands of merchants. Toast also relies on word of mouth among restaurant owners.
Barash said that Toast isn’t looking to get acquired and is aiming for an initial public offering at an unspecified time down the road.