How Toast Built a $20B Vertical SaaS on Restaurant SMBs

ALL STAR SAAS FUND partners Tatsuya Koumae and Yuto Saeki dissect Toast’s product, sales, and hiring playbook as a benchmark for vertical SMB SaaS founders.

• Toast IPO’d September 2021 at roughly ¥3 trillion market cap on ~¥50 billion annual revenue — proving SMB vertical SaaS can reach that scale.
• Vertical SaaS market cap grew 10x from 2010 to 2020 per cited industry data; restaurant, construction, and beauty verticals are current hot spots.
• Toast’s product sequence: POS (2013) → gift cards → multi-store management (2 years later) → inventory, payroll API, hardware — each layer locked out competitors before the next was built.
• Toast Capital (launched 2020) finances restaurant working capital via third-party banks; real-time POS data enables lower-rate loans, and the fees now represent a large share of total revenue alongside subscriptions and payment processing.
• Bessemer Venture Partners’ Series B IC memo confirmed inside sales — not just web marketing — as the core conversion channel; pure product-led growth is insufficient for SMB verticals.
• Toast hires account executives with restaurant-industry backgrounds (ex-beverage sales reps, former food-service software vendors) alongside SaaS sales veterans to maintain credibility with operators.
• Customer success must stay high-touch even for SMB accounts; CS doubles as customer marketing to surface cross-sell and expansion opportunities across the all-in-one suite.
• Toast’s employer branding includes publishing hiring processes publicly, employee story videos, a VP-level DEI role, and a formal partnership with a Black engineering advocacy organization to widen the talent funnel.

2025-06-26 · Watch on YouTube