Toronto restaurant software provider TouchBistro Inc. plans to hire 300 people next year and expects to reach $100-million in revenue by 2020 after raising $72-million in a venture-financing deal led by OMERS Ventures and U.S. banking giant JP Morgan Chase & Co.
The financing, first reported by The Globe and Mail days before its final closing on Wednesday, will also enable the firm, whose point-of-sale software platform is used by 12,000 restaurants mostly in the United States, Canada and Mexico, to expand into Europe and South America in the next year.
“We want to get to those markets before someone else does,” chief executive officer Alex Barrotti said in an interview. “’There are some very exciting times ahead of us.”
The funding marks the latest in a spate of sizable “growth” financings led by Canadian institutions of promising Canadian tech startups that have evolved into globally minded “scale-ups,” a signal that the Canadian technology and venture scene is maturing.
Founded in 2010, TouchBistro offers technology that enables waiters to process orders and payments and split bills between patrons using iPad tablets loaded with its app. TouchBistro gets a revenue share from payments processors for each restaurant it signs up using its platform.
This month, 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 VC firm Georgian Partners. Breather Products Inc. of Montreal, which is hoping to bring the Uber- and Airnbnb-style “sharing economy” business model to the office market, said last week it raised $60-million in a deal led by the Caisse de dépôt et placement du Québec to expand its presence in key global metropolitan centres.
TouchBistro, which is adding close to 500 restaurants a month and has been doubling sales every year, processes more than $6-billion in gross restaurant sales annually. It is on track to generate more than $25-million in revenue in 2018. It’s one of several startups, including San Francisco-based Revel Systems and Boston’s Toast Inc., offering a new cloud-based software product to the restaurant business.
But TouchBistro is expected to get a significant leg up when a partnership with Chase, announced earlier this year, goes live 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. That deal, which preceded the bank’s decision to participate in the venture financing, “should dramatically affect our revenue,” Mr. Barrotti said. He added that since the Chase partnership was announced, other banks have approached TouchBistro to strike similar arrangements in South Africa and Britain.
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. It plans to test a new application for consumers to let them know which restaurants use TouchBistro and another for waiters that work at multiple TouchBistro-enabled establishments so they can track their shifts and compare how much they earn at each location, Mr. Barrotti said. The company’s hiring plans would see it double its 300-person employee count.
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 IT Venture Fund are also participating in the TouchBistro financing.