Skip to main content

Toronto’s TouchBistro close to finalizing $70-million financing led by OMERS

Toronto restaurant point-of-sale software provider TouchBistro Inc. is close to finalizing a deal that will see it raise more than $70-million in a venture financing led by OMERS Ventures and U.S. banking giant JP Morgan Chase & Co., The Globe and Mail has learned.

Sources familiar with the deal say it would value TouchBistro – which recently landed a key distribution partnership with the U.S. banking giant south of the border – at more than $180-million before the receipt of funds.

Previous investors Napier Park Financial Partners, a U.S. private-equity firm, Tokyo technology platform giant Recruit Holdings Co. Ltd. and Canada’s Relay Ventures and BDC Capital are also participating in the financing, sources say. The parties signed a term sheet earlier this year and the deal is expected to close within days. A small portion of the funds raised will go to employees or other early investors, while sources say the company is also considering an additional secondary offering that would see employees sell part of their equity in the company for up to $18-million in total.

Story continues below advertisement

The deal marks the latest in a spate of sizable “growth” financings led by Canadian institutions of promising Canadian tech firms that have evolved past the startup phase and into globally minded “scale-ups,” a signal that the Canadian technology and venture scene is maturing. Last week another Toronto-based software firm serving the restaurant industry, Ritual Technologies Inc., said it had raised US$70-million in a deal led by Canadian venture-capital firm Georgian Partners to fuel its global expansion.

As well, earlier this week Breather Products Inc. of Montreal, which is hoping to bring the sharing economy to the office market, said it raised $60-million in a deal led by the Caisse de dépôt et placement du Québec to expand its density in key global metropolitan centres including New York, San Francisco and London.

Founded in 2010, TouchBistro is believed to be generating more than $20-million in revenue and processing more than $6-billion in gross merchant sales on an annualized basis. It’s one of several startups, including San Francisco-based Revel Systems and Boston’s Toast Inc., trying to bring new cloud-based digital solutions to the fragmented restaurant business.

With the company’s technology, which has been deployed to more than 12,000 restaurants in Canada, the U.S., the U.K. and Mexico – with more than 400 coming online every month – waiters can process orders and payments and split bills between patrons, using iPad tablets loaded with the company’s app.

TouchBistro is also hoping to convince its restaurant customers to let it use data through the platform to help determine market prices for certain food and beverage items in local markets and bring additional value to its platform.

The company, led by CEO Alex Barrotti, is expected to get a significant leg up when its partnership with Chase, announced earlier this year, goes live some time this summer. Through that deal, TouchBistro will gain access to thousands of restaurants, brewers and other players in the food-service industry who are Chase clients, and start promoting its platform through more than 5,000 Chase bank branches. Chase chose TouchBistro as part of a competitive process among providers of restaurant point-of-sale solutions.

TouchBistro gets a revenue share from payments processors for each restaurant it signs up using its platform. Those payments, which account for 15 per cent to 18 per cent of revenues, will increase to about 25 per cent with the Chase deal.

Story continues below advertisement

Mr. Barrotti declined to comment on the company’s financing plans.

Report an error Editorial code of conduct
Comments

Welcome to The Globe and Mail’s comment community. This is a space where subscribers can engage with each other and Globe staff. Non-subscribers can read and sort comments but will not be able to engage with them in any way. Click here to subscribe.

If you would like to write a letter to the editor, please forward it to letters@globeandmail.com. Readers can also interact with The Globe on Facebook and Twitter .

Welcome to The Globe and Mail’s comment community. This is a space where subscribers can engage with each other and Globe staff. Non-subscribers can read and sort comments but will not be able to engage with them in any way. Click here to subscribe.

If you would like to write a letter to the editor, please forward it to letters@globeandmail.com. Readers can also interact with The Globe on Facebook and Twitter .

Welcome to The Globe and Mail’s comment community. This is a space where subscribers can engage with each other and Globe staff.

We aim to create a safe and valuable space for discussion and debate. That means:

  • Treat others as you wish to be treated
  • Criticize ideas, not people
  • Stay on topic
  • Avoid the use of toxic and offensive language
  • Flag bad behaviour

Comments that violate our community guidelines will be removed.

If your comment doesn't appear immediately it has been sent to a member of our moderation team for review

Read our community guidelines here

Discussion loading…

Due to technical reasons, we have temporarily removed commenting from our articles. We hope to have this fixed soon. Thank you for your patience. If you are looking to give feedback on our new site, please send it along to feedback@globeandmail.com. If you want to write a letter to the editor, please forward to letters@globeandmail.com.