Presto, a supplier of AI voice, tablets and other technology for restaurants, is now a publicly traded company, marking a step forward for restaurant automation.
But it will have to persuade investors that its vision for a more automated industry can be profitable as it works to sell its tech to more restaurants.
Presto was founded in 2008 by Rajat Suri, who dropped out of MIT to start the company. Its first product was a rudimentary pay-at-the-table device. Now, it sells more high-tech tabletop tablets as well as voicebots and camera systems designed to help restaurants automate operations.
Its AI voice technology is behind the automation of drive-thrus at Checkers and Rally’s, and it works with “hundreds” of other chains, though many of its relationships aren’t public.
Its debut on the Nasdaq last week completes a merger with Ventoux, a special purpose acquisition company (SPAC). The deal was announced in November and restructured in July at a lower valuation and with more private financing. It ultimately yielded $120 million in cash for Presto.
The public funding will allow it to continue developing its technology and make acquisitions, and put it in league with some of its publicly traded restaurant customers, Suri said.
He views automation as the future of the restaurant industry, which has spent the past year coming to grips with a smaller and more expensive labor pool.
“This industry is addicted to low-wage labor, and that input is going away,” he said.
And while he believes Presto’s customers understand this, investors may need some convincing. Presto’s stock was down 68% since its listing on Sept. 22, with shares trading at just over $2 on Wednesday.
“Our customers believe that [automation] is happening now,” he said. “Investors may not know that. So I think the proof will be in the pudding over the next couple of months.”
According to documents filed with the U.S. Securities and Exchange Commission, Presto has lost money on operations each of the past two years ending June 30, posting a loss of $33.2 million in 2022 and $24.5 million in 2021.
The losses and a lack of working capital led an independent auditor to determine that there is “substantial doubt about [Presto’s] ability to continue as a going concern,” according to the filings.
Most of Presto’s revenue has come from selling or leasing Presto Touch tablets as well as gaming on the devices. But it expects much of its near-term growth to come from selling voicebots and camera systems.
It also noted in the filings that it may need additional financing in the short- and long-term to stay afloat.
The company said it expects to continue operating at a loss until the first quarter of 2024 and to have negative cash flows until the third quarter of 2023 as it works to expand its customer base and sell more products.
Suri downplayed concerns about the newly public company's stock price. “The markets are crazy right now. They’re super turbulent,” he said. “We’re really focused on the long-term, automating these restaurants.”
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