A leading provider of restaurant labor productivity technologies is going public in a SPAC deal announced Wednesday.
The SPAC Deal
Presto announced a SPAC merger with Ventoux CCM Acquisition Corp valuing the company at a pro forma equity value of $1 billion.
A PIPE of $70 million includes investment from founder and CEO Rajat Suri and several restaurant franchise groups for companies including Yum! Brands, Inc., Applebee’s, Outback Steakhouse and McDonald’s Corp.
Presto will be named Presto Technologies Inc and listed on the Nasdaq after the merger with a stock ticker to be announced. Public VTAQ shareholders will own 17.4 percent of the new company.
Targeting the $205 billion restaurant labor market, Presto is one of several companies that have brought emerging technology to the restaurant industry.
The company offers next-generation touch, vision, and voice technologies. Presto is a market leader in labor productivity and has shown it can improve guest satisfaction, highlighting that by using its software, servers can take more tables and guests’ check amounts increase.
In its lifetime, Presto has shipped more than 250,000 systems and counts several of the top 20 restaurant chains in its customer base, including BJ’s Restaurants, Applebee’s, Chili’s, Red Lobster, Outback Steakhouse, and Yum! Brands (Pizza Hut, Taco Bell, KFC, and The Habit Burger Grill.)
Presto counts Fiserv Inc, Oracle Corp, PayPal Holdings Inc, and Visa Inc as strategic partners.
Presto was founded by Rajat Suri, the co-founder of LYFT Inc, and was started as a pay-at-table device that grew to include more options for customers and restaurants.
Challenges from the COVID-19 pandemic have led to well-publicized labor shortages for the restaurant industry. Presto said it can help improve labor and margins for restaurants going forward.
“COVID-19 and subsequent labor challenges have created an industry reset, driving restaurants to embrace technology enablement,” the company said.
Presto lists a pipeline of $1.6 billion from potential restaurants it is in talks with and said it can continue to add units and large restaurants to its customer base.
Proceeds from the merger are expected to help the company expand in its market and invest in adjacent markets to hospitality.
The company offered its technology to hospitals and senior care facilities during the COVID-19 pandemic to allow loved ones to say goodbye. This program included the delivery of 20,000 tablets to more than 2,000 healthcare facilities.
Presto lists Toast Inc, Lightspeed Commerce Inc and OLO Inc as companies in the enterprise food technology market.
Presto reported a fiscal 2020 revenue of $26.1 million. The company is projecting $30 million of revenue for fiscal 2021.
Presto is guiding for revenue to grow at a compounded annual growth rate of 94 percent from fiscal 2021 through fiscal 2023.
VTAQ shares are trading down 0.60 percent at $10.00 on the last check on Wednesday at publication.
By Chris Katje
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