Ibotta Raises $20M for Mobile App that Delivers Rebates to Consumers
Ibotta, a Denver-based startup, specializes in helping users of its mobile savings app earn cash. The company itself has been pretty good at raising money since its founding in 2011, and it just closed a $20 million round, according to a recent SEC filing.
Ibotta makes a free app for iOS and Android that, it says, helps consumers earn rebates and cash rewards and helps brands increase awareness and customer loyalty. Users unlock rewards by responding to polls, watching videos, reading about new products, or doing other game-like activities.
Users get access to special rebates after completing tasks. They redeem the rebates after shopping, verifying their purchases by taking a picture of their receipts using their smartphones or tablets. The money they save is then sent to their PayPal or Venmo accounts.
A spokesperson for Ibotta could not be reached Wednesday morning, and the company did not release an announcement giving additional details about the funding round.
But Ibotta founder and CEO Bryan Leach did explain how Ibotta works and its business model earlier this year during a Startup Grind presentation.
Ibotta “delivers content and media about the world’s leading brands, so it gives you a chance to learn more about different brands and products you might buy,” he said. “By interacting and learning about the brands, what you’re doing is unlocking rebates.”
Brands have long used rebates as a way to try to get consumers to spend money, but Leach said Ibotta gives the concept a twist that’s a lot friendlier to shoppers.
“Instead of the old rebate method of cutting out the UPC and mailing it in, which is something we all associate with pain and frustration, it’s essentially instant cash rewards sent to your PayPal account as soon as you buy a product in the grocery store or a movie theater or a restaurant,” Leach said.
Ibotta’s website says users have earned more than $7.5 million from the rebates. Ibotta launched a new version of its app in November, and at the time Leach told TechCrunch the company had more than 1.9 million users who had viewed 1.5 billion offers.
For consumers, the benefits are a few extra bucks saved, but Ibotta pitches retailers on a different idea. Leach calls Ibotta “a pay-per-sale” advertising platform that only charges advertisers and brands if their ads end in a sale.
He thinks it’s a results-driven model that could upend how advertising traditionally works.
“What we’re saying is unless you can track what media results in, in an actual purchase, you should never pay for it,” Leach said.
The company says on its website it works with more than 80 retail chains, including Walmart, Target, Costco, Whole Foods, and Safeway. A few movie theater and restaurant chains such as Chilis also work with Ibotta.
Those partners add up to more than 100,000 locations, the site said.
Ibotta raised a $3 million seed round in early 2012, and it raised at least $7.9 million in 2013. In total, the company has raised at least $30.9 million.
An interesting detail about Ibotta is that Leach started the company after leaving a promising career in law that included a stint as a clerk for U.S. Supreme Court Justice David Souter. For more on Leach, Ibotta’s founding, and his views on Denver’s tech scene, check out the video.