Ibotta’s IPO exceeds expectations
Ibotta, the Denver-based digital marketing and consumer rebate platform, raised $328 million for its investors and $198 million for itself in an initial public offering that outstripped expectations this week.
Underwriters had expected the company could get between $76 to $84 a share, in an offering that was intended to allow earlier investors to exit with a nice return. But on Wednesday night, demand was so strong that Ibotta’s underwriters were able to price 6.6 million shares at $88 apiece, a figure that included 2.5 million for corporate uses.
When those shares hit the New York Stock Exchange under the ticker IBTA on Thursday, the opening trade soared to $117. The price came down from that initial high and ended the day at $103.25, which represents a 17.3% premium to Wednesday night’s offering price and values the company at $3.1 billion.
“We are off and running,” said Bryan Leach, CEO of Ibotta, which he founded in 2011 after the idea came to him on a flight back from Brazil.
Although Walmart is a high-profile backer of the company, most of Ibotta’s investors are “angels” or small investors, a group that included family members, longtime friends and former roommates who were willing to back Leach long before private equity firms gave him the time of day.
Institutional investors didn’t show up until after the company’s fourth round of funding, Leach said. The company counts more than 100 angels and Thursday’s offering gave them a chance to fly away with a nice reward.
The company also has been generous in providing shares to its employees, who also benefitted from the offering.
In all, Leach estimates that Ibotta’s IPO minted more than 150 new millionaires, many of them based in Denver. He said his hope is the money they made will help launch other new businesses.
“We didn’t need to raise money, but it is a way for us to grow faster, to make investments in accelerating our technology,” Leach said of the company’s decision to offer its own shares given the strong demand.
Having public shares makes Ibotta stock options more attractive and will help recruit top technology talent, Leach said, adding that the company has had to import a lot of its talent from other locations.
“We have been a Denverfirst place, designed and built in Denver,” he said. “We hope this development puts Denver even more on the and brings the world’s best talent to Denver.”
Ibotta has rebated more than $1.8 billion back to consumers since 2012 via its relationship with 850 different clients representing 2,400 consumer packaged brands, according to a prospectus filed with the U.S. Securities and Exchange Commission.
Walmart, Family Dollar and Kroger are just some of the large retailers that use the company’s Ai-driven software to provide promotions based on customer’s anticipated purchasing behavior. The mobile shopping app in 2019 became Denver’s only “unicorn” or tech start-up worth more than $1 billion.