Ibotta went public on Thursday opening at $117 per sharea large increase from the IPO price of $88, itself an increase from the proposed range of $76 to $84 per share.
And that pop is despite boosting the size of its offering earlier in the week, with existing shareholders extending their selling by just 1 million shares.
Shares haven’t continued to climb in early trading, but are holding steady above their IPO price at around $100 at the time of writing.
The company left money on the table “for investors who are very bullish on it [expanding] The third-party platform beyond Walmart,” which has become a key partner for Ibotta and accounts for much of its current revenue, said Nicholas Smith, senior research analyst at research firm Renaissance Capital before the IPO. Since it started trading well above its IPO price today, some critics may argue that it left too much money on the table and could have raised more for itself.
Its successful debut marks the third major tech IPO in the United States this year, and is the third in a row to be priced well and immediately traded higher. It’s also the first half of a pair of technology deals to be unveiled this month, with a data management and security company Rubrik is expected to list its own shares next week. The two companies follow Reddit and Astera Labs out of the private markets, as both the social media and data center connectivity hardware company continue to trade above their IPO prices.
Investor enthusiasm for Ibotta shows that “there’s a growing appetite for IPOs again,” Smith said, “particularly in the tech space.”
Don’t pop the champagne for the tech IPO market making a comeback, though. Ibotta turned to business sales in a direct-to-consumer model, which has helped it reach profitability in recent periods. Classic tech IPOs tend to feature tech companies that are still in growth mode and deep in the red.
Rubrik could be a better test of IPO appetite. Its products are in the world of data management and security, and the company is deeply unprofitable and growing more slowly than Ibotta. That said, it has a strong cloud revenue story to tell. If its debut goes well, we could see more but unprofitable unicorns try a shot at the mass markets.
Smith agrees, calling Rubrik’s upcoming IPO “an even bigger test” for tech debuts “given its weaker current financial picture.”
We’ll find out next week.
