Ibotta prices IPO well above range

2 min read
Americas
Anthony Hughes

Ibotta drew overflowing investor demand before opting to price its NYSE IPO well above the marketing range for proceeds of US$577.3m.

Late on Wednesday, a syndicate led by Goldman Sachs, Citigroup and Bank of America priced the sale of 6.56m shares in the Walmart-backed consumer rewards app and digital promotions firm at US$88.00 versus the US$76–$84 range.

The offering comprised 2.5m new shares and 4.1m from selling shareholders including CEO Bryan Leach and a unit of privately held Koch Industries. Walmart, which holds warrants over an 8.3% stake in the company, did not sell in the offering.

The deal was heavily oversubscribed, creating high expectations as to how the stock will perform when it debuts on the NYSE on Thursday under the ticker symbol "IBTA".

Earlier this week, Ibotta took the step of upsizing the offering by about 16% from 5.65m shares at launch with additional insider selling.

The IPO terms give Ibotta a fully diluted market capitalisation of US$3.1bn versus its 2023 revenue of US$320m, the latter up 52% on 2022.

Ibotta's pivot to profitability last year and transformed growth profile since forging a strategic relationship with Walmart in 2021 have enhanced its appeal to investors.

Nearly all the company's recent growth has come not from its direct-to-consumer mobile app that launched in 2012 (with which consumers can snap their grocery receipts to earn cash back) but from third-party websites such as Walmart's, which uses Ibotta technology for its cashback rewards programs.

In 2021, Ibotta – its name is based on the words "I bought a" – became Walmart's exclusive provider of digital item-level rebate offers and issued warrants to the retailer in return for access to its customers.

Revenue from third-party websites generated 33% of Ibotta's sales last year, up from a modest contribution a year earlier, but management expects this to ramp up to 70% in the long term.

Aided substantially by this shift, Ibotta delivered a net profit of US$38.1m last year, up from a US$54.9m loss in 2022.

Ibotta also expects to report a first quarter net profit of US$7.3m–$9.3m, reversing the US$4.3m loss in the same period last year, on revenue of US$80.8m–$82.3m (up as much as 43%).