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Ibotta shares rise on “overwhelming demand” after IPO raised more than $577 million

Shares of Walmart-backed Ibotta opened at $117 on Thursday and peaked at $117.59 after being priced at $88 in a 20% oversubscribed initial public offering on Wednesday.

In late afternoon trading, shares were down to about $105, still up 19% from Wednesday's close. The initial price for the shares – 6.56 million were sold at $88, raising more than $577 million – was between $76 and $84.

“We just had overwhelming demand,” CEO Bryan Leach told Fortune on Wednesday. “There weren't nearly enough supplies. That still doesn’t exist.”

Matt Kennedy, a senior IPO strategist at Renaissance Capital, which conducts pre-IPO research and manages two IPO-focused ETFs, told Fortune that Ibotta's pricing at $4 above high-end at least partly accounts for its growth company. In the fiscal year ended Dec. 31, revenue rose 52% to $320 million. For 2023, the company reported a net income of $38 million, compared to a loss of nearly $55 million in 2022.

“It is very encouraging to see that demand has been robust enough to keep prices above the range,” Kennedy added. “VC-backed technology IPOs have been very rare. There have only been a handful in the last two years.”

But after this lull, the market is heating up – especially in the technology sector. Last month, Reddit raised $748 million in a highly anticipated offering, and Astera Labs secured $713 million. But shares of both companies have declined since the steep rise immediately following the IPOs, so Ibotta could prove to be a real test of recent IPOs, Kennedy said.

“Because there are so few technology IPOs, any deal that gets a lot of attention can generate that excitement,” Kennedy told Fortune. “People expect pops, and I think that’s proven true on Reddit and Astera Labs.”

The biggest IPO of the year so far remains for Amer Sport, the maker of Wilson tennis racquets, which raised $1.37 billion in February, according to Dealogic. Next week, Rubrik, a Microsoft-backed cloud data security provider, is scheduled to make its debut on the NYSE, a deal that could raise up to $713 million.

But unlike Ibotta, Rubrik hasn't yet turned a profit, Kennedy noted, which could dampen investor demand for shares of another “potentially fast-growing but extremely unprofitable” technology company.

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