Restaurant SaaS platform Olo files for IPO

Thought this was an interesting upcoming IPO. Restaurant SaaS platform Olo filed for 100 million dollar (placeholder) IPO.

Some take-aways from the prospectus:

Intro and activities

  • Founded in 2005, headquartered in NYC
  • SaaS platform with three core offerings to restaurant chains:

Ordering (initial offering): A fully-integrated, white-label, on-demand commerce solution, enabling consumers to order directly from and pay restaurants via mobile, web, kiosk, voice, and other digital channels.
Dispatch (launched in 2015): A fulfillment solution, enabling restaurants to offer, manage and expand direct delivery while optimizing price, timing, and service quality
Rails (launched in 2017): An aggregator and channel management solution, allowing restaurants to control and syndicate menu, pricing, location data, and availability, while directly integrating and optimizing orders from third-parties into the restaurants’ point-of-sale, or POS, systems.

  • Integrated with more than 100 other technology solutions, such as PoS systems, aggregators, payment processors, delivery service providers (Doordash, Uber,…), loyalty programs. As Olo is the “central” platform for all these solutions and integrations, they are deeply embedded in the restaurant industry.
  • Fixed monthly subscription fee per restaurant location for the “ordering” module. Additional transactional revenue from “Rail” and “Dispatch” is generated for each order. In most cases, additional transactional revenue is generated by charging aggregators, channel partners and other service providers in their ecosystem for access to Rails and Dispatch. In 2020, 56.7% was subscription revenue and 43.3% transaction revenue.


  • Approx. 400 restaurant brands as customers, with a total of 64.000 locations. Their focus is on restaurant chains, not your local mom and pop restaurants.
  • 100% of revenue earned in the United States
  • Signature customers: Five Guys, Shake Shack, Applebee’s, Chili’s, Cheesecake Factory, Denny’s, iHOP, Subway, Peet’s Coffee, Dairy queen, Wingstop
  • Focus on fast growing customers that open a significant number of new locations each year. As revenue is driven by # of locations and # of orders, Olo is able to grow together with the customer
  • 71% customers use all 3 offerings as of 2020, up from 44% in 2019
  • Average contract length of 3 years with continuous automatic one-year renewals afterwards
  • Rails module transaction revenue from their largest digital ordering aggregator, DoorDash, accounted for 19% of total revenue in 2020. DoorDash filed a lawsuit against Olo in October 2020. The complaint alleges breach of contract related to fees charged to DoorDash. DoorDash seeks damages in excess of $7.0 million.


  • 14.6 billion $ GMV in 2020, 1.8 million orders/day. GMV has nearly doubled in each of the last 5 years.
  • 120% net revenue retention rate. 99% gross retention rate over the last 5 years!! Net revenue retention is expected to decrease as more and more customers directly onboard with all 3 solutions, rather than land and expand

  • 94% revenue growth in 2020 with a total revenue of 98 million $, accelerated from 59% growth in 2019 due to the COVID-19 pandemic. As all restaurants had to build out their online offering, this has been a tailwind to Olo. On a quarterly basis, revenue growth looks like this: Q1 - 55% ; Q2 - 100% ; Q3 - 94% ; Q4 - 118%
  • Profitability for FY2020: 81% gross margin and 16% operating margin (on a GAAP basis!!, 22% on a non-gaap basis), 20% FCF margin
  • Cash efficient, raised less than 100 million $ primary investment capital since inception 15 years ago


  • Current TAM of $7 billion in North America. Penetration of 1.4%
  • By providing new services to customers such as on-premise solutions (e.g. table-top dining through the use of QR coding and kiosk ordering), they believe they can increase the fee per transaction, increasing the TAM to $15 billion
  • By pursuing SMB restaurants (vs. only larger chains now), the TAM would expand to $20 billion
  • The opportunity outside the United States is at least as large as their domestic opportunity, implying a total global TAM of $40 billion
  • Growth initiatives:

Continue adding new high-growth restaurant brands and locations in the United States
Upsell additional modules to existing customers. Note that 71% of customers already use all
modules so opportunity to expand is limited with the current product offerings.
Enable higher transaction volume by improving the product offering and increasing the share
of transactions that flow through their platform
Develop new product offerings (around payments, on-premise dining and data analytics)
Expand the ecosystem through more integrations with other technology solutions
Pursue SMB restaurants in the United States and restaurants outside of the United States
Address adjacent verticals such as grocery chains and convenience stores for ready-to-eat meals


You also might enjoy Jamin Ball’s piece on Olo. He publishes “Clouded Judgement” and did a nice writeup on Olo along with sharing many of the important SaaS metrics you mentioned above. He provides some nice visual charts comparing Olo’s figures to some of our other favorite companies, as well. Enjoy.…

-Rob (how many Robs are on this board, anyway?)


Thank you both for bringing this company to the board, and the link to Jamin Ball’s S1 benchmarking, which had outstanding charts detailing OLO metrics compared to other SaaS companies.

Remains to be seen if their business has a post-covid drop-off, but I like this one a lot, and bought some shares after their IPO today.

Thanks also to suitpaul for this separate OLO thread on Saul’s board.

OLO hasn’t gotten too much attention, so wanted to compile the info here, and bring this back up to the board’s attention, as the stock finally had their IPO today.

My post has some additional articles, including a spotify broadcast from TMF:

I think this is the latest article from TMF (Brian Feroldi)…

"Lewis: Yeah. A big part of where restaurants are going, 2020 accelerated this, is the idea of digital touchpoints, ease of order, logistics that the customer doesn’t have to think about at all. It just shows up for you. For as much as that’s been on display, I think in the past year, Brian, it is a very small part of the overall restaurant business. I think this is one of those categories that e-commerce has under-penetrated.

Feroldi: It really is. The company’s numbers say that. As of 2019, less than 10% of total restaurant sales were done through digital channels. Obviously, that number has accelerated and grown significantly. But as we pointed out previously, a lot of the restaurants that are on delivery platforms do not own the customer experience. They are reliant on Grubhub, or Uber Eats or whatever, to actually give them the order information. Olo provides those same restaurants with the ability to add delivery options right to their own website, right to their own apps. What’s interesting about this company is it has really taken an open-access approach. Olo isn’t a walled garden. In fact, one of the things they point out is that it integrates with over 100 different software products that are available at restaurants today. So, that could be point-of-sale systems, could be payment processors. It could be on tablets, it could be loyalty programs, all of those speak directly to Olo’s platform, and boy, is that an advantage for the company."


“Feroldi: Yeah, that’s correct. I want to hammer home the importance of the openness of the platform. They are enabling over 100 different technology solutions to be plugged in. That might not sound like a big deal, but the company points out that over 70% of its customers have two to four technology providers just on order collection, and that’s within the existing company. It helps to simplify a company’s own technology platform inside it, let alone aggregating all kinds of different payment systems and loyalty parts. That is something that really glues this company together.”


“Feroldi: This company generates revenue in three main ways. Two of them we should care about as investors, one of them we shouldn’t. The platform revenue is split between subscription based products, so they charge a per restaurant, per month fee, just to be on the old platform and that was about 57% of platform revenue last year, down from 93% in the prior year. However, they also have a transaction fee, and that is based on their dispatch model, as well as their analytics model. That is based on each transaction they take a fee for and that was 43% of revenue last year, up from 7% in 2018. The final revenue path that they have is professional services revenue for implementation. We’ve seen that with many SaaS companies, where they also have a small revenue component just to get people on board. That is only about 5% or 6% of sales and it’s flexible or margin, so we, as investors shouldn’t pay too much attention to that. It’s really the platform revenue that we care about.”



I have some concerns re: their Moat. This seems like an area we could see Square enter into relatively easily. Perhaps I’m misunderstanding the complexities being solved by this SaaS offering, but it does not initially strike me as having a large barrier to entry.


There wasn’t a barrier to entry for Zoom, either…didn’t seem to hurt them too much.

Either way, Olo is the mkt leader for what they do:…

64,000 restaurants, 400 brands.
I have never seen Square even mentioned in any articles I have read.

Here is an example of a company in that ecosystem partnering with both, for different purposes:
For example, look at this company describe relationship with both Olo and Square:…

“VROMO will be seamlessly integrated into Olo’s cloud-based food-ordering platform to manage delivery and driver communication. The other partnership will give the VROMO platform greater functionality by using world-class payment technology to enable restaurants to take payments securely and efficiently through Square.”



I would be careful here, assuming 60% growth this year they are still trading at approx 30 times forward revenue

Why I would be cautious:

  • More than 70% of the customers are already using all 3 modules. Limited opportunities for upselling here. The last module release was in 2017 so that doesn’t scream innovation to me, if you compare that for example to Datadog and Crowdstrike who are adding new modules on an almost quarterly basis
  • A significant part of their revenue (don’t remember exactly but def. more than 30%) is driven by the number of orders. As more people will dine-in again, this will be a significant headwind

Wouldn’t be surprised if their >90% revenue growth slows down to 30% or so within the next year. I am interested but will wait until I get a better picture of their revenue growth on tough comps in second half of this year. Market is now pricing them for continued >50% growth but call me doubtful.