More than a decade after Rajat Suri dropped out of a doctoral program at MIT to start catering technology company Presto, he is now on the cusp of taking the company public. Presto will merge with special purpose acquisition company Ventoux CCM Acquisition Corp. to become a public company with an estimated pro forma net worth of around $ 1 billion, the company announced last week.
âReaching this stage is very rewarding not only for me personally, but truly for everyone who has been involved in the business for so long,â said Suri, Founder and CEO of Presto and Co-Founder of Lyft.
The transaction will be funded by cash from Ventoux’s trust account in the amount of approximately $ 172.5 million and gross proceeds of $ 70 million from the issuance of equity and convertible financing. As a result of the transaction, which is expected to close in the first half of 2022, Presto plans to add more than $ 223.3 million in cash to its balance sheet.
The IPO is the next maturing step for the 13-year-old company, which specializes in automating labor savings, Suri said. Presto works with several companies, many of which are publicly traded. Going public on its own helps it better align with these catering businesses, as it shows that Presto has already been subjected to a level of scrutiny and compliance, Suri said. Presto currently works with several of the top 20 restaurant chains, including Chili’s, BJ’s Restaurant, Denny’s, McDonald’s, Taco Bell and Yum Brands.
Joining the public market also has additional benefits. The change in status will make it easier for Presto to acquire businesses and attract talent, Suri said, adding that having cash in his inventory can provide an added advantage in a market where there is so much. competition for talent.
“I have been doing this for a long time and it has been a pivotal year for the entire restaurant technology industry. It is all due to increased demand within the industry.”
Founder and CEO, Presto
“We are riding the tails of other successful catering technology companies that have gone public this year. It also benefits us. The wave lifts all boats, so to speak,” he said. “It will really help the industry at a time when [it’s] really struggling with a labor shortage.
Presto’s debut on the New York Stock Exchange follows a wave of not only restaurant companies launching IPOs, but also restaurant tech players including Toast and Olo. Toast, which went public in September, raised more than $ 870 million on day one of trading, while Olo debuted in March with a $ 450 million IPO.
âI have been doing this for a long time and it has been a pivotal year for the entire restaurant technology industry,â said Suri. âIt was all driven by increased demand within the industry. There are just more restaurants embracing technology.
McDonald’s, Wendy’s, Krystal and Burger King are just a few of the chains using various forms of artificial intelligence and automation to improve the drive-thru experience, for example.
Many investors are also increasingly aware of the untapped potential of the restaurant technology market, believing that many technology companies could grow another five to tenfold, Suri said.
“[Presto is] even less than 10% entered the market, âhe said. âInvestors love the fact that they see the winners go public and they double down.
A boost to technological development
Presto will raise millions of dollars in capital through the release process, which will serve to improve its workforce productivity and customer experience technologies, Suri said.
Presto offers three platforms to help improve work productivity. Voice enables customers and staff to interact with natural, conversational-style automated speech recognition with 94% accuracy. This technology can help free up a staff member to do other tasks, like preparing food and packaging it for pickup, Suri said.
Presto Touch technology can be used for customers to pay at the table, as staff handhelds, kiosks or as a driving line bus. Touch can allow staff to serve more tables, reduce wasted time and receive more tips, Suri said.
The company’s Vision product uses cameras to measure throughput and order accuracy and can identify any issues, such as long waits at drive-thru, and provide real-time feedback. This technology can also be used to identify drive-thru cars and allows drivers to pay with a registered credit card. It could also grab favorites from previous dinners to rearrange them, he said.
“We think [demand] will just grow up. â¦ Some restaurants really understand that they need to automate and they’re going head-first, âhe said, adding that once some of Presto’s final deals with corporate chains are done, it might make others want to add automation as well.
For Presto, its sales pipeline has more than doubled this year and is worth over $ 1 billion. With restaurants hit by the labor crisis, many chains are exploring technology that could improve their situation.
âAutomation is a long-term job [trend]. This is not a flash in the pan in the short term, âhe said.
Suri expects the technology adoption trajectory to resemble what has happened in the restaurant market in Japan, which has experienced a labor shortage for the past 10 years. Japan has entire restaurants operated with one person due to a combination of technology and simplicity, he said. Conveyor Belt Sushi Chains, for example, use robots to manage high fish prices. Customers find a table using a touchscreen and use tablets to order and check in with a self-service cash register after their meals. Ultimately, he believes all Western countries will be in the same boat where restaurants operate with fewer staff while taking advantage of automation.
âI believe that in five years Presto will have made significant progress on our mission statement, which is to overlay next-generation digital solutions on the physical world,â said Suri. âTouch, vision and voice are our starting point today. I think in five years it will be a lot more mature, a lot more common in the industry. “