Ibotta staged a robust NYSE debut on Thursday after earlier drawing overflowing investor demand and pricing its IPO well above range for proceeds of US$577.3m.
Shares in the Walmart-backed consumer rewards app and digital promotions platform opened at around 12:50pm New York time at US$117.00, up 33% from the offering price. Yet little more than an hour later, the stock had pulled back to US$98.00 for a more measured 11.4% gain.
Late on Wednesday, a syndicate led by Goldman Sachs, Citigroup and Bank of America priced the sale of 6.56m Ibotta shares at US$88.00 versus the US$76–$84 range.
The offering was north of 20x covered, a syndicate banker said. Management achieved an 80% conversion rate in one-on-one meetings with institutional investors and allocated 60% of the shares to the top 10 accounts and 85% to the top 25.
The IPO terms gave 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 first-day performance marked the latest strong showing from the tech sector after bullish debuts from Astera Labs and Reddit last month. It also comes ahead of next week's scheduled debut of cybersecurity software firm Rubrik, expected to draw heavy investor demand as only the second US subscription software IPO since late 2021.
Unlike most hot tech IPOs, Ibotta did not require investors to make a trade-off between growth and profitability since the company's financial profile has been substantially enhanced by a 2021 partnership struck with Walmart, the world's biggest retailer.
Ibotta last year delivered a net profit of US$38.1m, up from a US$54.9m loss in 2022.
The partnership meant company – whose name is based on the words "I bought a" – became Walmart's exclusive provider of digital item-level rebate offers. Ibotta also issued warrants to the retailer in return for access to its customers.
Nearly all Ibotta'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 that use Ibotta technology for its cashback rewards programs.
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.
Ibotta also expects to report a first quarter net profit of US$7.3m–$9.3m, reversing a US$4.3m loss in the same period last year, on revenue of US$80.8m–$82.3m (up as much as 43%).
The IPO 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.
Earlier this week, Ibotta took the step of upsizing the offering by about 16% from 5.65m shares at launch with additional insider selling.