- Ibotta is a cashback rewards platform allowing consumers to claim back a portion of their purchases on a wide range of products and services.
- The company has many leading brands as program partners, including Kellogg's, Coca-Cola, Target, Anheuser-Busch, Uber, Walmart, and Amazon.
- Ibotta makes money by charging its partners affiliate and advertising fees and selling transaction data.
Bryan Leach founded Ibotta in 2011, receiving more than $73 million in funding by 2016. Legendary Silicon Valley entrepreneur and investor Jim Clark is an investor and board member. Ibotta operates out of its headquarters in Denver, and it's one of the leading cashback apps in the US market.
Ibotta partners with over 1,500 brands and companies and offers consumers cashback on their purchases. Ibotta gives users access to its platform through a dedicated iOS and Android app or its desktop browser extension. The company has paid out over $860 million in cash back to its user base.
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What does Ibotta do?
Ibotta is a consumer service allowing users to earn cashback rewards when they make a purchase with one of the company's partners.
Users can shop on Ibotta, browsing various product and service categories, including health and beauty, grocery and pickup delivery, pet supply, travel, entertainment, and much more. Ibotta launched its web application and app in October 2012, with Leach securing angel investment from several VCs.
The company took $3 million in seed funding, and by 2017, Ibotta was the third most-used cashback rewards app in the US market, with 22 million downloads. Ibotta reached the legendary "unicorn status" in 2019 after receiving a billion-dollar valuation.
How does Ibotta work?
Ibotta offers its users the chance to earn cashback rewards on online or in-store purchases with its partners. Users can conduct online purchases using the browser extension or mobile app for iOS or Android devices.
Ibotta automatically calculates your cashback rewards during checkout, with no need to upload receipts to the platform to receive the rewards. With in-store purchases, the user takes a photo of their receipt, uploading it to the Ibotta platform.
The AI scans the receipt, issuing cash back rewards for purchases of products from qualifying partner brands. Users will receive these rewards within 24-hours of uploading their receipts.
The Ibotta mobile app also makes recommendations of local store offerings to users through analyzing location data fed to the system by the user's device. Ibotta has issued more than $860 million in cashback rewards to its users.
How Ibotta makes money
Ibotta makes money by charging its partner's affiliate commissions for bringing them business. The company also earns through its advertising services and by selling anonymized aggregated transaction data to brands and companies.
Ibotta's biggest revenue stream comes from the affiliate commissions it charges its partners. Ibotta works with some of the world's biggest brands, which is why it's such a hit with the consumer market. Some of its leading partners include companies and brands like Coca-Cola, Target, Walmart, and Kellogg's.
Ibotta negotiates individual partnership agreements, adjusting the commission rate depending on the partner's volume of transactions through its platform. Typically, Ibotta charges anywhere between 1% to 3% in commission for each sale made by its users.
Ibotta targets the female millennial demographic, earning between $50,000 to $100,000 per annum. Depending on negotiations, companies and brands can advertise through the app, paying Ibotta a per-ad impression or fixed fee.
Ibotta uses deep learning and machine learning technology to track user information on purchases with its partner companies and brands. It sells this data to companies that want to analyze a market for future promotions and marketing campaigns.
It's important to note that the company doesn't sell personal user data. Instead, it only offers aggregated, anonymous data on its transactions. Pricing depends on the quality and quantity of data provided by Ibotta.
Future growth engine
Ibotta recently adopted a "data lake" solution to improve tracking and user efficiency. The data lake is a huge success. It offers Ibotta a cost-effective and scalable solution enabling the company to fulfill its mission of "data democratization."
Ibotta competes for market share with other cashback rewards apps and credit card companies offering cashback programs. Some of its top competitors are the following companies.
- Fetch Rewards
- RetailMeNot, Inc
- Shop Savvy