Toast software helps restaurants process payments and handle orders.
Courtesy of ToastToast , Freshworks and a.k.a. Brands Holding made their public market debuts Wednesday as action in the IPO market picked up after the summer lull.
More than a dozen companies are scheduled to open for trading this week. Both Toast and Freshworks raised more money than expected, while a.k.a. Brands priced its initial public offering at the bottom of the range it had told investors to expect.
Shares of Toast (ticker: TOST) kicked off Wednesday at $65.26 and soared to a high of $65.99. In mid-day trading, the stock changed hands at $60.55, up 51% from its offer price.
The strong debut came after Toast raised nearly $870 million, selling 21,739,131 shares at $40 each late Tuesday. The Boston fintech had initially filed to sell 21,739,131 shares at $30 to $33 each, which it increased to $34 to $36 each on Monday.
Goldman Sachs & Co, Morgan Stanley , and J.P. Morgan are lead bookrunners on the deal.
Toast provides point-of-sale software that helps restaurants and bars process payments and streamline orders. About 48,000 restaurant locations used Toast’s software to process more than $38 billion of gross payment volume during the past 12 months, the prospectus for the deal said.
The fintech has raised $902 million in funding, according to Crunchbase. Tiger Global Management, a frequent technology investor, will have voting power of nearly 13%, while venture-capital firm Bessemer Venture Partners will own 12.42%, the prospectus said.
A.k.a. Brands (AKA) also began trading. The stock opened at $9.50, below its $11 offer price, and hit a high of $10.88. Shares recently traded at $10.51, off than 4% from its offer price. This makes a.k.a. Brands a so-called broken deal in that it hasn’t delivered the early gains many IPOs deliver.
Based in San Francisco, a.k.a. collected $110 million after selling 10 million shares at $11 each. The company had initially filed to offer 13.9 million shares at $17 to $19, which it slashed Tuesday to 10 million shares at $11 to $13.
BofA Securities, Credit Suisse and Jefferies are lead bookrunners on the deal.
Founded in 2018, a.k.a. acquires fashion brands that are geared to millennials and Gen Z consumers who get their fashion inspiration from social media. These consumers also mainly shop online and by using mobile devices.
Freshworks (FRSH) was the last of the trio to open. Shares launched at $43.50, soared to a high of $47.50 and recently traded at $46.34, up nearly 29% from its offer price.
Freshworks delivered the solid performance after raising $1 billion late Tuesday, selling 28.5 million shares at $36 each. Freshworks had initially planned to offer 28.5 million shares at $28 to $32 each, but increased that to $32 to $34 a share on Monday.
Morgan Stanley, J.P. Morgan and BofA Securities are lead underwriters on the deal.
Freshworks offers software that helps businesses automate routine and repetitive tasks, such as sending welcome emails and setting follow-up reminders for executives. The San Mateo, Calif., company has raised $484 million in funding,according to Crunchbase. Tiger Global will have voting power of nearly 26%, while the venture firm Accel will have more than 25%, according to the prospectus for the deal.
Write to Luisa Beltran at luisa.beltran@dowjones.com
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September 22, 2021 at 11:46PM
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Toast and Freshwork Stocks Gain in Market Debuts as IPO Activity Resumes - Barron's
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