Ibotta’s Initial Public Offering Experiences Favourable Reception, Signaling Growing Interest in Technology Stocks from the Public Market

Ibotta’s journey as a publicly traded company began on Thursday, as it hit the market with a bang, opening at $117 per share. This was a significant increase from its initial IPO price of $88, which was itself higher than its anticipated range of $76 to $84 per share.

Despite increasing the size of its offering earlier in the week, with existing shareholders expanding their sale by nearly one million shares, shares are currently holding steady above the IPO price at around $100 as of writing.

The company left money on the table “for investors who are very bullish on it [expanding] its third-party platform beyond just Walmart,” said Nicholas Smith, a senior research analyst at pre-IPO research company Renaissance Capital. This partnership with Walmart has been crucial for Ibotta and has contributed to a significant portion of its current revenue. However, with its stock trading well above its IPO price, some may argue that the company could have raised more for itself.

The successful debut of Ibotta marks the third major tech IPO in the United States this year and the third in a row to price well and immediately trade higher. It is also the first of two technology offerings that will list this month, with data management and security company Rubrik expected to follow next week. These two companies join the ranks of Reddit and Astera Labs, who also recently went public and have maintained steady trading above their IPO prices.

The excitement from investors for Ibotta’s IPO indicates a growing appetite for IPOs, particularly in the tech sector, according to Smith. However, he cautions against getting too ahead of ourselves, as Ibotta has pivoted to focus on business sales rather than its previous direct-to-consumer model. This shift has helped the company achieve profitability in recent periods, which is not a common characteristic of classic tech IPOs that typically feature companies still in the growth stage.

Rubrik’s upcoming IPO will be a more significant test of the market’s appetite for tech debuts. This company operates in the data management and security industries and is currently deeply unprofitable with slower growth than Ibotta. However, it does have a strong story to tell when it comes to its cloud revenue. If Rubrik’s debut proves successful, we may see more yet-unprofitable unicorns taking their chance in the public markets.

Smith believes that Rubrik’s IPO will be a “bigger test” for tech IPOs, given its weaker financial standing. We will have to wait until next week to see how it plays out.