How Does Ibotta Make Money? Analyzing Its Business Model

Executive Summary:

Ibotta is a platform that enables its users to earn cashback rewards when shopping at the over 1,500 brands it partners with. The service is available via its mobile apps as well as through the firm’s browser extension.

Ibotta makes money through affiliate commissions, advertising services, and selling aggregated and anonymized data to other businesses. It operates under an affiliate business model.

Founded in 2011, Ibotta has grown to become one of the leading cashback platforms in the United States. It has paid out over $1.2 billion in cashback rewards to this date.

How Ibotta Works

Ibotta is a service that allows users to earn cashback rewards on purchases. The company partners with more than 1,500 brands.

Customers can shop with Ibotta in categories such as grocery and pickup delivery, health and beauty, travel, pet supply, entertainment, and many more.

Ibotta can either be used when shopping online or during in-store shopping trips.

Online purchases can be conducted using your computer (via its browser extension) or through Ibotta’s mobile app (available on Android and iOS devices).

When using your computer, you simply have to install Ibotta’s browser extension. It will then automatically apply cashback rewards during the checkout process.

For in-store purchases, users simply have to take a photo of their receipt and upload it to the Ibotta app. Earnings are then paid within a 24-hour timeframe.

The app even goes as far as suggesting nearby offers from brands and stores that it partners with. Location tracking has to be enabled for that.

Ibotta has reimbursed over $1.2 billion in cash rewards to over 40 million customers since its inception.

A Short History Of Ibotta

Ibotta, headquartered in Denver, Colorado, was founded in 2011 and is, to this date, led by its founding CEO Bryan Leach.

Leach was born in Nairobi, Kenya, where his father, David Leach, worked as a car salesman. The family relocated to Atlanta in the 1980s because his old man would start a local business.

That company, Harbinger Corporation, became a leader in e-commerce software and network services and pioneered concepts like electronic data exchange (EDI).

At its peak, over 1,000 people were employed by Harbinger. These employees served more than 40,000 active customers generating annual revenues north of $155 million.

Bryan, from an early age, would spend his summers helping out with the business and get a first-row seat to how messy yet rewarding startup life can be.

Harbinger Corporation went public in 1995 and was eventually sold to Peregrine Systems in June 2000. Bryan had already moved on to bigger and better things, though.

In 1996, he enrolled at Harvard to pursue a degree in Social Studies. He then went to Oxford for a two-year funded Marshall scholarship and rounded that up with a law degree from Yale’s prestigious law school.

At Oxford, he got his first taste at operating a business. He founded Executive Walking Tours, which sold guided tours around the Boston area. He was even able to hire employees which, in total, provided excursions to over 1,000 customers.

After he wrapped up his law degree, Leach went on to work for a couple of judges, including one of the Supreme Court justices, David Souter. In 2007, he became a partner at Bartlit Beck a Denver-based law firm.

One day he was flying back from an arbitration conference hosted in Rio de Janeiro, Brazil. A woman seated next to Leach was using her smartphone to take a picture of her receipts for expense reimbursement.

A light bulb went off: what if you could do the same for shopping receipts and earn cashback rewards instead? A few months later, Leach handed in his resignation and began working on what would turn into Ibotta full-time.

Ibotta’s website and app eventually launched in October 2012. Leach was able to convince a variety of angel investors to back the business with $3 million in seed funding. They included Tycho Howle (co-founder of Harbinger Corporation & NuBridges), Larry Sonsini (who took Apple, Google public; represents Google Ventures; head of top Silicon Valley law firm), and many more.

On top of that, industry veterans joined him on the journey. Some of the all-stars he was able to recruit were Gregory Mann (who had 20 years of experience working for Martha Stewart, Avon, and more), Mary Kay (former president at TSG), or Luke Swanson, a former VP of Engineering at Photobucket.

The reason why Leach recruited predominantly retail-focused personnel was the firm’s initial focus on grocery products. When Ibotta launched, it announced partnerships with the likes of Target, Walmart, CVS, or Walgreens.

The startup was, furthermore, able to establish relationships with 8 of the world’s 10 largest consumer packaged goods firms.

Users would then earn cashback by uploading a receipt as well as taking a poll, learning a fact about the brand, answering a trivia question, watching a video ad, or sharing their purchases on social media.

This allowed the firms that Ibotta partnered with to not only motivate customers to shop but learn something about the brand and its products.

In the next few years, Ibotta added more categories (such as clothing or travel) to its list of reward options. Furthermore, it introduced some critical product improvements, such as the ability to check out within the app (2014) or automatically scouting a merchant site for applicable cashback offers (2015).

By 2017, Ibotta became the third most-used shopping app in the United States. Its app was downloaded more than 22 million times up until then.

The team, furthermore, continued to add outside capital to its balance sheet, raising $20 million in 2014, $40 million in 2015, and $25 million in 2017. The cash infusion allowed Ibotta to pursue more and more ambitious projects, too.

In 2019, it launched its first-ever payment solution called ‘Pay with Ibotta’, which enabled shoppers to pay for their entire purchase using the Ibotta app. The move put them in direct competition with the likes of Apple Pay or Venmo.

That same year, Ibotta finally earned its status as a unicorn, being valued at $1 billion after the firm’s Series D.

A few months later, Ibotta announced another major milestone with the launch of the Ibotta browser extension, emulating the model that allowed Honey to sell to PayPal for $4 billion.

Despite small setbacks (Ibotta had to let go of some of its staff as a result of the coronavirus pandemic), the company continued to solidify itself as one of the major players in the cashback rewards space.

By late 2021, rumors began to emerge about a potential IPO. Instead, Ibotta acquired its first company. OctoShop, a browser extension whose tech it baked into its own extension products, was acquired for an undisclosed amount in December 2021.

How Does Ibotta Make Money?

Ibotta makes money through affiliate commissions, advertising services, as well as by selling aggregated and anonymized data to other businesses.

Let’s take a look at each of these revenue streams in more detail below.

Affiliate Commission

Ibotta’s primary source of revenue comes from affiliate commissions paid out by its advertising partners.

These partners, including brands like Coca-Cola, Walmart, or Kellogg’s, pay Ibotta for every successful redemption via its app or desktop extension.

The amount of money paid out is pre-negotiated by the 2 parties. In essence, it is a percentage of the overall purchasing volume and normally ranges between 3 to 10 percent for most items.

Ibotta’s fiercest competitors, which include Fetch Rewards, Rakuten, and Upside, monetize their platforms via similar strategies.

There are a few reasons why advertisers would pay Ibotta (after all, they could simply advertise the products themselves, right?).

First and foremost, its platform just represents an additional channel with which its partners can generate sales.

Ibotta’s user base is geared towards a millennial crowd that’s earning anywhere between $50,000 to $100,000 a year and is predominantly female. That user demographic may be the exact target customer some of these brands are seeking.

Second, purchases on Ibotta can be easily tracked via the deep linking technology the company uses. This allows the brands to exactly assess how much they’re spending to acquire a user and what particular products are the most lucrative to sell.

Lastly, brands on Ibotta can target consumers via multiple channels (and thus different stages of the shopping journey), using both the firm’s desktop extension as well as its mobile applications.

Ibotta has since introduced a solution that powers the rewards offerings of other businesses. Dubbed the Ibotta Performance Network (IPN), it allows any retailer to set up their own rewards program without much technical know-how.

For example, Walmart+ members can now earn Walmart Rewards through digital offers sourced by Ibotta on and the Walmart app. Ibotta, in all likeliness, receives a portion of the fees that are generated via its network.


As previously mentioned, users on the Ibotta app occasionally see videos or other promotional material popping up.

These are simply ads that help to promote a particular brand. Consequently, brands pay Ibotta for that additional exposure, either on a fixed-fee or per-ad impression basis.  

Whether it’s advertising or affiliate commissions – Ibotta’s business model is largely predicated on increasing the number of users on its platform.

The more shoppers are onboarded and actively use the platform, the greater the number of ad impressions as well as affiliate commissions Ibotta receives.


Although not publicly stated, but it can be assumed that a small portion of Ibotta’s revenue comes from the sales of data.

Brands would then get access to aggregated and anonymized consumer data. Example data points could entail the average sales price of a given product category or when certain products are being sold the most.

These sales normally represent one-time deals and are initially requested from the brand’s side. Pricing is dependent on the amount and type of data shared.

Ibotta Funding, Valuation & Revenue

According to Crunchbase, Ibotta has raised a total of $92.9 million across 7 rounds of venture capital funding.

Prominent investors into the company include Teamworthy Ventures, GGV Capital, Koch Disruptive Technologies, as well as Harbor Spring Capital.

During Ibotta’s latest round of funding (Series D), announced in August 2019, it was able to garner a valuation of $1 billion.

As a private company, Ibotta is not obliged to disclose any revenue or profit figures. It can be assumed that it continues to lose money in an effort to expand its business.

Hi folks, Viktor checking in! Years of experience in various tech-related roles have led me to start this blog, which I hope provides you with as much enjoyment to read as I have writing the content.