🍻 Toast - The Ultimate Vertical SaaS For Restaurants

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You need to be a vertical expert to succeed. 2/3 of Toast employees previously worked in a restaurant which makes it easier to build and sell the right product for restaurants.

Alexandre Dewez • 🍻 Toast - The Ultimate Vertical SaaS For Restaurants

Toast has 4 revenue streams: SaaS, financial services (payment processing and loans), hardware and professional services.

Alexandre Dewez • 🍻 Toast - The Ultimate Vertical SaaS For Restaurants

Vertical SaaS can support longer payback periods than generalist SaaS. Historically, Toast had a 18-month payback period which is extremely long for a company selling to small businesses (I would have expected something between 6 to 12 months). It works because Toast has a verticalised and all-in-one platform. As a result, it becomes the last soft

Alexandre Dewez • 🍻 Toast - The Ultimate Vertical SaaS For Restaurants

1. SaaS: restaurants pay to access SaaS products developed by Toast (e.g. POS, kitchen display system, invoice management, digital ordering and delivery, marketing and loyalty, and team management) with a 12-36m engagement.2. Financial services: restaurants pay fees to get access to Toast’s services which facilitate payment transactions or to get w... See more

Alexandre Dewez • 🍻 Toast - The Ultimate Vertical SaaS For Restaurants

Being the record system. For restaurants, Toast's platform is at the core of their business. Toast started with the POS which put the solution at the center of their customer operations as all transactions passed through the POS. It was a great position to become the tech backbone of their customers.

Alexandre Dewez • 🍻 Toast - The Ultimate Vertical SaaS For Restaurants

SaaS TAM = 5% of vertical sales. On average, companies spend 5% of their sales on technologies. It means that a vertical SaaS with an-in-one platform can charge up to 5% of the revenues generated by its customers.

Alexandre Dewez • 🍻 Toast - The Ultimate Vertical SaaS For Restaurants

Expand your TAM by processing payments. Toast is a perfect fintech-enabled business. It has a SaaS product but generates 78% of its revenues and 97% of its gross profit from financial services (both payment fees and interests on working capital loans).

Alexandre Dewez • 🍻 Toast - The Ultimate Vertical SaaS For Restaurants

Things You Can Learn From Toast as a Vertical SaaS?

Alexandre Dewez • 🍻 Toast - The Ultimate Vertical SaaS For Restaurants

In the coming years, Toast will center its growth strategy on (i) acquiring new customers & upselling existing customer base in North America, (ii) expanding its platform by releasing new product features and adding new partners to its open ecosystem, (iii) expanding geographically beyond North America, (iv) acquiring companies mainly to expand... See more