Editor’s note: A previous version of this story listed Ibotta as the first tech unicorn in Colorado. It is the only tech unicorn in Colorado. The headline has been changed to update this correction.
Colorado’s only tech unicorn is one that wants to kill traditional coupons. It’s nothing personal of course, but rather a shift toward an app-based system that offers cash back when shoppers buy anything from burritos to groceries.
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Ibotta, a Denver-based payments company just raised an undisclosed nine-figure Series D led by Koch Disruptive Technologies. The company is now valued at $1 billion. The startup offers a coupon alternative for consumers that want to save money and get cash back rewards. Users of the Ibotta app can shop at places like Uber, Chipotle, Whole Foods, among others and get cash back rewards for each transaction.
Bryan Leach, founder and CEO of Ibotta told me that its “trying to put the paper promotions business out of business.” In addition to offering cash back awards, Ibotta lets users purchase using those rewards through their own app.
The free Ibotta application has more than 35 million downloads, and to date Leach said the company has given $600 million back in rewards to its customers.
Ibotta’s angle isn’t necessarily an outlier in the fintech space. When allowing payments in-app, he explained that there are “certainly a lot of moving pieces.”
“You need to be compliant with relevant regulations, you need to be aware of how to mitigate risk, fraud, and you also have to have a larger user base in order to be interesting to merchants,” he said. The exec compared Ibotta’s in-app purchasing power to China’s WeChat.
The especially unique aspect of Ibotta is that its enabling the mom-and-pop liquor store down the street (for example) to have a sophisticated tech element through a dedicated app that pushes customers their way.
“Most grocery stores may have not invested heavily in their own apps… many people have never even built their apps,” he said. And that’s “because they can rely on our traffic, because we’ll give them their share of voice and footprint.”
For retailers with existing robust rewards program, like Starbucks for example, Ibotta provies a convenient add on.
“Every retailer has their own loyalty program, but the problem is there’s millions and millions of people who don’t have [every retailer’s] app on their phone,” he said. A single app that aggregates all your favorite brands from Adidas to Burger King, tends to be convenient, he added.
Leach said the company’s size helps.
“If we were too small we wouldn’t be considered able to move the needle to [a customer’s] business, plus we wouldn’t have the marketing budget,” he said. “But if you get too big it’s hard for you to pay attention to fast emerging trends and new disruptive technologies.”
Illustration: Li-Anne Dias.
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