I spend an average of $300 on groceries a month; my fridge and cabinets are stocked with generic items and on-sale products, and I generally base my shopping list on Sprouts and King Soopers ads. But even with diligent research and self-control, groceries still make a significant dent in my teacher's paycheck.
In January, when Denver Public Schools teachers were contemplating a strike, a friend told me about Ibotta, a free application that gives cash back for purchases. Creating my grocery lists from items mentioned on the app, so far I've gotten $142 back. I even received $34 for a $77 purchase on the wholesale site boxed — and I didn't even have to leave my home.
The app is the brainchild of CEO Bryan Leach, who launched it at the end of 2012. Ibotta has been downloaded by nearly 30,000,000 users, making it the largest app to come out of Colorado. According to Leach and his team, Ibotta has paid consumers $500,000,000 while growing to 600 employees and counting. The Denver-based company plans to hire 100 more workers in the next year in finance, accounting and legal, operations, marketing, analytics and data science, human resources, client partnerships and client success.
I'm a teacher, and I wanted to find out more. So I reached out to Leach to learn how he created Ibotta, why Colorado is its home base, and the struggles the company has faced since its launch.
Westword: How does the app make money?
Bryan Leach: Ibotta is one of the most widely used shopping apps in the country, with nearly 30 million downloaded users. Ibotta works directly with our affiliate partners, including Coca-Cola, Kellogg’s, Anheuser-Busch, Target, Wal-Mart, Amazon and Uber, to provide personalized offers within the app, and our savers earn cash back by redeeming those offers. Ibotta makes money through these affiliate partnerships and a pay-per-redemption advertising model, as partners pay to advertise to Ibotta's user base, only paying when the consumer redeems the offers. Ibotta then shares that money with its users, effectively “cutting the consumer in on the deal.”
What challenges has Ibotta had to overcome?
Recruiting talent in Denver has never been more challenging, and new competition continues to enter the scene and fuel the ongoing battle to attract the best and brightest. Ibotta has committed to a joint effort by dozens of Colorado companies banding together for a unified recruitment effort called Pivot to Colorado that is aiming to attract talent from Silicon Valley to Denver. By joining forces with like-minded companies, Ibotta is helping to showcase the city’s entrepreneurship and innovation, and driving talent recruitment from all over the country and the world.
Why are the headquarters in Colorado?
We are in Colorado for a few reasons. First, we think this an excellent talent pool in terms of the kind of people we employ. We are a consumer-tech company, so we are looking for people that know all about mobile technology, know about marketing mobile technology, engineers that can build mobile technology, and data scientists. There are a lot of universities, coding academies and prior companies that have been successful in the tech space. All of that creates a talent pool that is already here in Colorado, plus it's fast-growing among 25-to-35-year-olds, and we have a pretty young workforce. People want to live downtown and near where they work, and they want to work on something that's mission-focused. Denver attracts that kind of person.
We have a lot of opportunities to relocate the business — to the West Coast, for example. We like it here better; it's also a more affordable place to do business than places like New York or San Francisco. Denver has a very pro-entrepreneurial environment, with things like Denver Start Up Week and with having two governors in a row who are entrepreneurs.
I was living here because I love the outdoors, climbing fourteeners and skiing on the weekends, and I like raising my daughters in a place that has the values that the Colorado community has. I had a big say in choosing the location of Ibotta; in fact, there is language in our founding documents that specifies as long as i'm involved in the company at a certain level, we remain in Colorado.
Tell us about your educational and business background.
I went to Harvard for undergrad and studied international relations — government, basically. I then went to Oxford for a Marshall scholarship, which was a two-year funded scholarship at Oxford, and studied economic history. Then I went to Yale Law School. After I finished my degree, I worked for a couple of judges, including one of the Supreme Court justices, David Souter. I then moved out to Colorado to work at a law firm in the field of international arbitration.
What shifted you from law to developing Ibotta?
My father was an entrepreneur, and I grew up watching him build a company from a storefront in a mall in Atlanta to a multibillion-dollar company. I worked there in my summers as a kid and had a front-row seat to the crazy chaos of startup land. I think I also missed aspects of public speaking and performance: I was an actor, debater and tour guide. As a trial lawyer, I got to do some of it, but there was a lot less of that and a lot more research and writing. There was a lot of locking yourself in a room and writing for a deadline, which I did not do well at. I missed more human contact and stand-and-deliver public-speaking opportunities. I missed creativity. Being a lawyer was very analytical, but it wasn't very creative, and I wanted to be a part of building something that helped the world.
How did you get the idea for Ibotta?
I had the idea for Ibotta coming back from a business trip in South America when I was a lawyer. The idea was that it would be cool if there was a single starting point on your phone where you could earn cash — not points, but cash for anything you bought regardless of where you went. Whether you went to this grocery store or that grocery store, or the liquor store, clothing store, the pet store, regardless of whether you made a purchase online or offline, you have one single app that could collect all your cash. The thought was that I don't want a separate app for every place where I shop. I don't like coupons or keeping track of all these ways to save. I just want one ring to rule them all.
I had the idea because I watched a woman upload a receipt on the flight back from Rio. I was thinking about how powerful it is that our phone allows us to have control over, and empowers us to control, our own purchase data. If you can take a receipt for expense reimbursement, which is what the woman was doing, then I thought, what if you could take a picture of a receipt and get instant cash back, like a rebate? It grew from there to include many other related ideas. It started out as a thought experiment, and then I was able to raise money and find talented people who knew how to build that technology who either lived here in Colorado or who were willing to move here. We slowly grew into the business that we are today.
What effects on the community have you seen come from the app?
When we started out on Ibotta, you could either cash out on PayPal or you could contribute to a school. Apple actually changed its guidelines, making it no longer possible for us to directly give earning to schools. When we survey our users and ask them what they are doing with their cash, they fall into two categories. People who are using it to help them get by day to day: They pay for their school loans, they pay for their food — they buy what they want to make for dinner based on what offers are on Ibotta. They pay for their medical bills, so the app is kind of a necessity for this group. The other group of people view it as a way to add to a fun fund. They treat themselves to an extra latte or they save up to take their kids or grandkids to DisneyWorld. Or they use it to buy presents to put under the tree at the end of the year. Some people see it as a luxury and have fun with it, and other people use it as very much a part of their budgeting.
What are you most proud of in terms of how the app has come together?
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What we think is really cool is that we are a for-profit company that is giving away hundreds of millions of dollars a year and still managing to be a business and not a government handout. That's really rare to do well for your investors and at the same time help the world directly. Everyone says that they help the world with their product or service, but we literally do the most valuable thing you can do for someone, which is give them money. It's a pretty cool thing.
What do you see happening with Ibotta in the coming years?
We want to be the go-to app for all shopping. We want you to start every shopping journey with us instead of with Amazon or Google, and we want you to choose Ibotta whenever you pay for anything, anywhere, instead of using your credit card. That means you could be anywhere, and it also means you can then spend those earnings in new and exciting ways. Today you can take the earnings out, but we'd like to get to a place where you can have fun spending your Ibotta earnings in new and creative ways that we call "pay with Ibotta." That is something we will be talking about later on this year.
We have really big, bold, ambitious plans. We want to be the biggest consumer-tech company to come out of Colorado. We want to be known around the world as a Colorado company...which is why when you open the app, it says "designed and built in Colorado." We want to break through. We think consumer technology has a chance to make an impact in a different way, so we are excited about that mission.