Key Takeaways
- Ibotta, a performance marketing platform, aims to raise up to $472.5 million in its upcoming initial public offering, becoming another tech company to go public amid a flurry of IPOs.
- The company allows brands to market to consumers with promotions through its publishing network, which includes major retailers such as Walmart, Dollar General, and Family Dollar.
- The IPO filing showed that the company turned a profit in 2023, with a net income of $38.1 million, versus a $54.9 million loss the previous year.
- Ibotta could gain as artificial intelligence tech, which powers its platform, advances.
Ibotta, a performance marketing platform, aims to raise up to $472.5 million in its upcoming initial public offering (IPO), joining Reddit (RDDT), Astera Labs (ALAB), and Microsoft (MSFT)-backed Rubrik, among others, to recently file for IPOs.
The IPO offering consists of a total of 5.625 million shares, of which 2.5 million shares are from the company, and 3.125 million shares sold by existing shareholders.
The stock is expected to be priced between $76 and $84 per share and is set to trade on the New York Stock Exchange (NYSE) under the ticker symbol “IBTA.”
Ibotta’s Business Model and Existing Partnerships
Ibotta allows brands to market their products through its publishing network by connecting consumers with promotions.
The company reports that American shoppers have earned approximately $1.8 billion through its platform’s cash-back promotions since its founding in 2012.
The Securities and Exchange Commission (SEC) filing showed that the Coca-Cola Company (KO), PepsiCo (PEP), and other grocery and general merchandise companies are among the more than 850 clients that Ibotta connected to the Ibotta Performance Network.
The network brings promotions to consumers through the Ibotta app as well as some Walmart (WMT), Dollar General (DG), and Dollar Tree’s (DLTR) Family Dollar shoppers. Ibotta also disclosed that Walmart has invested in the company.
The IPO offering could serve as an opportunity for Ibotta to expand its partnerships.
Initial Look at Business Metrics Show a Profit
The S-1 filing offered potential investors a look into Ibotta’s financials, showing that the company turned a profit in 2023.
Ibotta reported net income for 2023 at $38.1 million, compared with a $54.9 million loss in 2022. The company reported revenue of $320.0 million in 2023, up from $210.7 million in 2022, according to the SEC filing.
Redemption revenue, which the company generates through its redemption offers across its platform’s network, accounts for the majority of the company’s revenue. In 2023, redemption revenue was $243.9 million, accounting for 76% of total revenue, up from $138.7 million in 2022.
Opportunity for AI-Driven Growth
Ibotta explained that the tech platform uses an artificial intelligence (AI)-enabled engine to effectively distribute offers to the right consumers.
The company uses “a large volume of item-level purchase data through our secure point of sale (POS) integrations with 85 different retailers” to “form a profile of each consumer based on what they have bought in the past and how they have responded to various price promotions.”
Ibotta could see significant gains as AI tech advances and is further integrated into its platform.
“The more data we accumulate, the smarter our recommenders become,” Ibotta said in the SEC filing, adding that “whatever our clients’ specific objectives may be—such as encouraging brand switching, shortening purchase cycles, incentivizing consumers to stock up, or promoting around key seasonal events—our platform helps them design a promotional campaign to accomplish their goals.”