Ibotta Business Model | How Does Ibotta Make Money?

Anamika Mahapatra Anamika Mahapatra
Jan 25, 2022 8 min read
Ibotta Business Model | How Does Ibotta Make Money?

I wonder if there's any space left to be explored in the tech space in the 21st century, or is it just a bunch of first-world issues. With this thought in mind, I present to you a story of a startup that filled the gap of online shopping and retail store closures.

If you purchase food, clothing, or whatever, you are entitled to receive money back. You spend a fortune on shopping, so why not make some money while you're there? This isn't about clipping coupons or looking for refunds. I'm referring to Ibotta.

Bryan Leach, an entrepreneur quit law to create Ibotta, a Denver-based company with over 400 staff, 20 m installs, nearly $100 million in funding, and alliances with Target, Walmart, and 1500 other companies. Ibotta, among the most popular mobile shopping apps in the U. S., was built in Denver in 2012. Ibotta aims to persuade millennials to do online shopping, and at the same time halt the trend of retail outlet closures by helping these stores.

Wanna know more about it? Let’s dive right in.

About Ibotta
How was Ibotta Founded?
Tagline and logo of Ibotta
Business Model of Ibotta
How does Ibotaa Make Money?
How is Ibotta Helping some of the Biggest Brands?
What is the Secret to Ibotta's Success?
Future Expansions
FAQ

About Ibotta

Ibotta is a free app that you may get for your smart device. You register an account and then they generate a set of products that you can get at a retail shop, a supermarket if you're purchasing a bottle of wine or a six-pack of beer. It'll come in handy when you're out pet shopping.

Ibotta Homepage
Ibotta Homepage

It works everywhere in the physical retail sector, and you choose which things you want to buy, then snap a pic of your receipt with your mobile or pay with your loyalty card, and they offer you a payback incentive right away. It's essentially a 21st-century version of coupons or rebates, with a quick cash prize that you can collect and use on a gift voucher or deposit into your bank using PayPal or Venmo.

You can now use it for all of your online orders, such as calling an Uber, ordering online, or booking a flight on booking.com, and it will connect you to other e-shopping experiences and offer you quick cashback as soon as it hits a buy-in another app.

How was Ibotta Founded?

Bryan Leach, founder of Ibotta was a Denver lawyer who was glad to resolve global contract issues in arbitration in cities like London and Singapore across the globe, but the most thrilling part of his job was growing his international arbitration practice. When it came to creating his firm and doing the research work, he didn't find it as enticing as he had hoped, and he hoped to be a part of a group of people who were looking to create something new.

One time, he was a little antsy when he returned from a conference in Rio de Janeiro saw one taking pics of his business cards so he could keep track of who he had just met at the conference, and Bryan thought about the disruptive power of mobile tech and how you could take pics of your receipt from the store and have quick access to data you need.

It turned into a task for him to discover how to convey promos and vouchers and have a direct link between the brand itself and the final user so these shoppers don't have to take these Lil chits into the shop, and he found that there was a lot of tension with the current methods and a large expense on poor tactics.

The regret of not giving it a shot outweighed the fear of failing at this venture. Although he lacked the necessary business and technical talent to make this app, he travelled to Silicon Valley in search of investors, and to his surprise, the backers were enthusiastic about the concept and were willing to become angel investors. So one step led to another, and he soon found himself with $3 million in initial funding, at which point he formed a team with the right skillsets and the ability to design this app.

Tagline and logo of Ibotta

Ibotta Logo
Ibotta Logo

"Life Rewarded" is the tagline of the Ibotta app, and it couldn't be more apt. It is a must-have app if you're hoping to save at least a few dollars upon each purchase. Every moment in daily life, to be exact.

Business Model of Ibotta

Value propositions

It's an app that links firms and customers. It assists customers by making their life easier. You get accessibility to unique refunds after performing tasks (reacting to polls, viewing films, etc), and cashback on daily purchases. There are real money benefits instead of credit scores.

Channels

The following are the channels used by them: Mobile app, Google Play store, Blog posts, Social networks, Media (Forbes and TechCrunch).

Customer relationships

They build customer relationships via Buying sprees, Couponing replaced by entertaining activities, Referrals, Cashback, brands exploration.

Customer segments

Their target audience is millennials and Retailers (Marketers, Walmart, Target, etc).

Key partners

Their key partners include - Top companies and merchants (FMCG, dining at diners, etc), PayPal and Venmo are two popular payment options, Investors, LiveRamp Alliance

Key activities

The activities performed by Ibotta are Cold calls, Auditing, Client Support Systems Engineering, Ecommerce, Data Analysis, Conflict Resolution, Promotion, Project Management, Content Creation, Research Strategies, Ads, Sales, PR, Staffing.

Key resources

It's a framework for smartphone use. The face recognition feature allows you to claim your deals by scanning your receipt. Other key resources include Designers, Salesforce, records of suppliers, Product details from customers, Analytics, and Investment.

Cost structure

Their cost structure comprises Lead generation, Branding, Promotion, IT infrastructure and communications, Software design, Operations, and Client service.

Revenue streams

Ibotta generates revenue by making the app Free for users, by earning modest fees from brands and stores, Answer polls, and paid ads.


F1 Revenue Model - How Do F1 Teams Make Money?
Formula One or F1 is one of the most popular sports in the world. Here’s a detailed look at the business model of F1 and how f1 teams make money.

How does Ibotaa Make Money?

Commissions from partners

Ibotta has used an associate fees business approach to earn revenue since its inception in 2012. Ibotta makes money for each sale made via their application by working with over 1,500 designer labels. Ibotta earns any moment a client buys the product through Ibotta at a partnered label.

Ads

Ibotta also earns money by offering marketers ad spaces and displaying them straight to users. They have a total of 8 different ad formats, like banner ads, instant messages, emails, etc.

Account Upkeep Charges

On profiles that have been idle for at least 6 months, it imposes a fee. It earns by taking funds from idle customers' Ibotta account "rewards" balances to pay for the cost.

Ibotta's influencer program

Performance marketing is the most intriguing part of lead generation and the transition to the sale for them and their affiliates. They don't charge for display ads, views, or hits; instead, they charge per piece sold performance, which is how their influencer program works.

They pay those who recommend a pal or post material that leads to someone utilizing their app. They split the profits based on the value of the user to them. They make it worthwhile for them to convey the narrative of how Ibotta saves folks time/money.

They found that the sector's general trend is to become apt to draw the distinction that assigns that traffic to the location where you bought that ad and away from inaccessible algorithmic media, which has induced firms like P&G to put a complete halt on display ads unless there's the best approach, and they portray one of those best methods.

How is Ibotta Helping some of the Biggest Brands?

They deal with over 1500 consumer packaged goods firms, the majority of which are attempting to tell their brand's narrative. They also collaborate with merchants with distinct goals. When it comes to FMCG firms, they just want to expose you to a unique product type and explain what makes their brand unique, but drawing your focus is difficult.

In a nutshell, they're a one-of-a-kind space where folks can explore a wider customer base eager to learn about what they've built. They understand that once customers test their brand, it'll become a frequent purchase. So what they've done is the brand connection in the form of small bite-sized factoids, recipes, and clips that let brands reach out to clients and target people known who prefer rivals' products, which is Ibotta's major value.

Stores are losing a big chunk of their market to e-commerce, but the fact is that mobile-influenced sales account for about $4 trillion in the US economy, which is ten times greater than e-commerce.

So, how can the technology be utilized to encourage consumers to return to their retail outlet?

Ibotta is providing a reminder and a reward to attain desired targets. They're expanding cart sizes and the number of visits to those shops while also making an effort to have the same chat about what sets their brand apart.

What is the Secret to Ibotta's Success?

3 most important factors in making an app that'll be on people's device's homepage throughout the globe are:

  • An explicit benefit offer, in this case getting cash rewards for daily transactions via a free app.
  • Using an app that works in every case where you'd like to buy something important, hence why, you now can book an uber and place orders on the app.
  • High rate of usage: they cover aspects where you can return to Ibotta and begin with Ibotta every time if it's online shopping or binge-watching rather than solely focusing on key value and rare deals, as others do.

Therefore, they’ll escalate the range of situations in which you can use Ibotta. On your dashboard, they'll make it a lot simpler to find highly relevant data. Their search is one of the greatest, allowing you to browse the catalogues of all places you would wish to buy something at once.

Future Expansions

The app will be expanded beyond the US. They're one of the top 5 best e-commerce platforms in the US, and there's still ample space for them to flourish. They're quite thrilled about launching the app in the UK, Australia, Canada, and the East - Asian nations. They're actively working on it.


Business Model of Honey | How does Honey make money?
Honey is a browser extension that helps you find right coupon codes. It was recently acquired by PayPal. Lets understand its business model and how it makes money.

Conclusion

I can't believe I am now finding Ibotta, although it's existed since 2012. Just for shopping, you'll get your money back? Gladly accept my request. Because of Ibotta, our daily regimen has altered, but it is worth giving a shot.

FAQ

Who is the CEO of Ibotta?

Bryan Leach is the current CEO of Ibotta.

How does Ibotta give money?

Ibotta earns money from its commission partners, ads, and influencer program, and shares the profit with the users.

How much do people earn with Ibotta?

An average Ibotta user earns between $10 to $20 a month.

Must have tools for startups - Recommended by StartupTalky

Great! Next, complete checkout for full access to StartupTalky.
Welcome back! You've successfully signed in.
You've successfully subscribed to StartupTalky.
Success! Your account is fully activated, you now have access to all content.
Success! Your billing info has been updated.
Your billing was not updated.