Koch-backed Ibotta, a Denver technology company that provides digital promotions along with performance marketing, went public on Thursday.
On Wednesday, Ibotta, Inc. (NYSE: IBTA) announced its initial offering of about 6.5 million shares of Class A common stock, of which 2.5 million was being sold by the company. More than 4 million shares were being sold by other companies, one of which was Koch Disruptive Technologies, a Koch Industries company in Wichita.
As of Wednesday, KDT owned a little less than 20% of Ibotta stock and was expecting to sell between 15 to 25% of the shares it owns. That percentage would amount to about 4% of the overall company.
"We're selling a vast minority (of shares)," said Byron Knight, the newly-minted president and chief operating officer of KDT. "We'll still own the majority of our shares."
The offering price of all shares that went public was $88 per share. The offering is expected to close on April 22, according to an Ibotta release.
In 2019, KDT led a financing round at a $1 billion valuation in Ibotta, which provides cash-back rewards for its users.
Ibotta’s product is called the Ibotta Performance Network (IPN), in which marketers advertise and offer digital promotions to people with the app. Some of the companies that use the service are Best Buy, Home Depot, Kohl’s and Walmart. Walmart is both an investor and client of the company.
Knight said KDT and Ibotta were in discussion on a daily basis figuring out what made sense to sell to be helpful to Ibotta, but also to provide some returns to Koch.
"We're one of the three largest shareholders," Knight said. "There actually needs to be enough float so that the stock can be traded actively. So there is an amount that is helpful for us to sell to be helpful to the company (Ibotta)."
Goldman Sachs & Co. LLC, Citigroup and BofA Securities are acting as joint lead book-running managers for the offering, with Evercore ISI, UBS Investment Bank and Wells Fargo Securities acting as joint book-running managers, Ibotta said in a release. Citizens JMP, Needham & Company and Raymond James are acting as co-managers for the offering.
The Colorado-based Ibotta started in 2012 by Bryan Leach, who remains CEO.
What was unusual for KDT when it decided to come on board is that Ibotta was already in a stable stage.
"This company was (on a) much later stage than some of our other investments," said Knigh, who used to run e-commerce at Georgia-Pacific in the consumer products division. "The profitability profile, the growth profile and their actual quantum of revenue is very different."
Knight is the new leader at KDT since Chase Koch left as CEO in March to become Koch Industries' executive vice president of origination and partnerships.
Even though Ibotta is going public, Knight said KDT always wants companies under their umbrella to do what is best for them.
"Companies go public for a variety of reasons — access to cash, or providing liquidity to folks," he said. "We don't think all companies should be public companies because we don't think they have the merits to be that... (or) the discipline."
But, Knight said, watching a company thrive is a great honor.
"It's kind of like parenting," he said. "It's a team effort. In this case, there's a lot of folks within Koch who have contributed."
With around 70 portfolio companies active in KDT, Knight said some will struggle and others with thrive. For him, Ibotta's performance over the last 18 months has been inspiring.
"It's exciting to see that next phase," Knight said. "It's like your kid graduating high school. That's not the high point of their life, hopefully, but it's a key milestone. And so, this is a great milestone."
