Olo Inc., which makes online-ordering technology for restaurants, was welcomed warmly to Wall Street on Wednesday as it seeks to benefit from an on-demand boom that was helped by the coronavirus pandemic.
The New York-based company’s shares surged 39% higher than their IPO price as they started trading on the New York Stock Exchange, ending their debut session at $34.75. Olo
priced its initial public offering at $25 a share late Tuesday, higher than its original target of $16 to $18 a share as well as the increased $20-to-$22 a share range it stated Monday. The offering was for 18 million shares, which set up Olo to raise at least $450 million at a valuation of $3.6 billion.
Olo, which was founded in 2005 and is short for “online ordering,” powers 1.8 million orders a day for well-known restaurant chains such as Denny’s Corp.
Cheesecake Factory Inc.
Shake Shack Inc.
as well as Peet’s Coffee, Jamba Juice and others. The company’s revenue surged 94% higher in 2020 from 2019, according to a filing with the Securities and Exchange Commission.
“As consumers have become accustomed to the immediate convenience of on-demand commerce, they are demanding the same digital experience from restaurants, placing significant pressure on restaurants to deploy solutions,” Olo disclosed in its IPO filing. “This demand has only accelerated since the onset of COVID-19, as on-demand commerce has become a necessity for the majority of restaurants.”
Olo said that as of Dec. 31, it had about 400 brand partners and its technology — which includes digital ordering and enabling delivery — was being used at more than 64,000 locations.
The company reported net income of $3.1 million on revenue of $98.4 million last year, compared with a net loss of $8.3 million on revenue of $50.7 million in 2019.
Olo had raised less than $100 million since its inception, it said, including from investors such as The Raine Group, Tiger Global Management and RRE Ventures.
The IPO was led by Goldman Sachs and J.P. Morgan, two of eight underwriters listed in the filing.