Ibotta's CEO Shares Insights on Timing Startups' IPO Ventures Effectively

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A Challenging Year for IPOs

The IPO market has not roared back in 2024 as many investors hoped it would — not yet, at least. Elevated interest rates (this week’s 50 bps rate cut notwithstanding) and uncertainty related to the U.S. election have prompted many companies to stay private and wait for better market conditions.

A Few Exceptions to the Rule

But a handful of companies did go public this spring. Enterprise rewards platform Ibotta, which builds the back-end rewards program infrastructure for enterprise clients like Walmart and Exxon, was one of them, debuting on the NYSE on April 18. Its IPO priced above its initial price range at $88 a share and debuted at $117 a share. It’s currently trading at $63 a share with a $1.7 billion market cap.

Ibotta’s CEO Weighs In

Ibotta’s CEO, Bryan Leach, told TechCrunch that five months after the IPO, he doesn’t regret taking his company public this year. Going public requires months of planning, and he thinks companies trying to time the market are making a ‘huge mistake.’

Who Knows What the Future Holds?

"Who knows what the [Federal Reserve] will do?" Leach said. "[Bankers say] it’s always better to wait, but you never know what will happen when you wait. At the end of the day, it’s not a destination, it’s a phase."

The Waiting Game

Numerous companies that were expected to go public in 2022 or 2023 are still waiting on the sidelines. Many of these companies are sitting on large valuations that they gained from funding rounds during the boom days of 2021, and they would have to suffer a haircut to go public.

The Numbers Don’t Lie

According to data, the number of IPOs has decreased significantly in recent years. In 2020, there were over 400 IPOs in the United States alone. However, in 2022, that number dropped to just over 200.

Ibotta’s Advice

Leach thinks that companies like Ibotta should not wait around for a ‘better’ market. Instead, they should take advantage of the current low interest rate environment and go public while they can.

Investors Remain Optimistic

But what do investors think? Do they agree with Leach’s assessment? According to recent surveys, investors remain optimistic about the IPO market and are waiting for the right opportunity to strike.

A Shift in the Market

However, there is a shift happening in the market. Interest rates have started to go down, and there is an increase in rumors surrounding companies hiring bankers to start the IPO process. Companies may be done waiting come 2025.

Conclusion

The IPO market has been challenging in recent years, but it’s not all doom and gloom. There are still opportunities for companies like Ibotta to succeed. As Leach said, "it’s not a destination, it’s a phase." The key is to stay flexible and adapt to the changing market conditions.

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