Ibotta upsized its NYSE IPO to US$550m early Tuesday amid overflowing demand and ahead of pricing later this week, the latest sign of improved momentum in the tech new issue market.
The consumer cash back/rewards platform now expects to sell 6.6m shares, up from 5.6m shares at launch last week, according to an amended SEC filing. All of the upsize is accounted for by additional secondary selling.
The marketing range of US$76-$84 is unchanged.
Joint bookrunners Goldman Sachs, Citigroup and Bank of America separately told investors the offering was multiple-times covered and likely to price above the marketing range, a syndicate banker told IFR.
Selling shareholders led by major holder Koch Industries provided the extra shares, increasing the secondary portion of the offering to 4.1m shares from 3.1m at launch (the primary portion is still 2.5m shares).
The syndicate plan to close the order books at 4:00pm Tuesday ahead of pricing late Wednesday.
The IPO terms give Ibotta a fully diluted market capitalisation of close to US$3bn versus its 2023 revenue of US$320m, the latter up 52% on 2022.
The strong demand for Ibotta shares is the latest sign the US tech IPO market is staging a recovery after last month's robust debuts from AI chipmaker Astera Labs and social media firm Reddit.
Ibotta's pivot to profitability last year has enhanced its appeal to investors and likely driven the timing of its IPO.
Nearly all the company's growth in the first quarter has come not from its direct-to-consumer mobile app that launched in 2012 but from third-party websites such as Walmart's, which uses Ibotta technology for its cash-back 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 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%).
CEO and founder Bryan Leach, who controls the company through holdings of super-voting Class B shares, is selling 531,000 shares (unchanged) to reduce his voting stake to 71.3% from 78.7%.
Walmart, which holds a 10%-plus stake in Ibotta through warrants, is not selling in the offering.