How Does Ibotta Make Money? The Ibotta Business Model In A Nutshell

Ibotta is a mobile technology company founded in 2012 by Bryan Leach, who envisioned a service allowing consumers to simply upload a photo of the receipt and receive instant cashback. Indeed, Ibotta makes money via affiliate fees and advertising.

Origin Story

Ibotta is a North American mobile technology company founded in 2012 by Bryan Leach.

Leach had the idea for the company after observing a passenger uploading a receipt for an expense report on an international flight. He envisioned a service allowing consumers to simply upload a photo of the receipt and receive instant cashback. What’s more, cashback could be earned for any product or service – whether that be online or offline.

Early versions of the app were limited to groceries and everyday purchases. Alcohol, travel, and clothing purchases followed in 2014, and two years later, online and mobile purchase functionality was added. Consumers can now pay for an entire purchase and earn cashback instantly via the Pay with Ibotta service.

Today, the Ibotta app partners with more than 1,500 brands and retailers. Over $860 million has been paid back to the user base of 35 million in the past seven years.

Ibotta revenue generation

The company ethos states that it is better to pay consumers than advertise to them. To that end, Ibotta shares a portion of its revenue with the consumer as part of the cashback scheme.

This begs the question – how exactly does it generate revenue?

Keep reading to find out!

Affiliate commissions

When an Ibotta user makes an eligible purchase, the company receives an affiliate commission from one of its advertising partners. These partners are some of the biggest brands in the world, including Kellogg’s, Amazon, Target, Uber, and Coca-Cola.

While it could be argued that these brands could advertise their own products, they are in effect paying for access to a highly targeted audience. Indeed, most of the Ibotta user base is comprised of middle to upper-middle-class female millennials. Brands can also target consumers on the Ibotta platform on multiple channels and at different stages of the buying journey

The exact commission is negotiated between both parties and is based on purchasing volume. However, it is typically in the range of 3 to 10%.

In some cases, the company also makes money by asking users to watch short videos or complete surveys to unlock special deals.


The Ibotta platform does feature advertising in the form of video content and other promotional material.

Once again, brands pay Ibotta for the additional exposure to a highly targeted audience. They can elect to pay for advertisements on a per-impression or fixed-fee basis.

Key takeaways:

  • Ibotta is a North American mobile technology company operating a cash-back shopping app. It was founded by Bryan Leach in 2012 after he watched an airline passenger go through the tedious process of uploading receipts for an expense report.
  • Ibotta earns affiliate commissions from some of the biggest brands in the world. When a user makes an eligible purchase, the brand pays Ibotta a fee of between 3 and 10%.

Read Next: How Does Acorns Make Money, How Does Honey Make Money, The Walmart Business Model, How Does Instacart Make Money.

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Related Business Model Types

Platform Business Model

A platform business model generates value by enabling interactions between people, groups, and users by leveraging network effects. Platform business models usually comprise two sides: supply and demand. Kicking off the interactions between those two sides is one of the crucial elements for a platform business model success.

Marketplace Business Model

A marketplace is a platform where buyers and sellers interact and transact. The platform acts as a marketplace that will generate revenues in fees from one or all the parties involved in the transaction. Usually, marketplaces can be classified in several ways, like those selling services vs. products or those connecting buyers and sellers at B2B, B2C, or C2C level. And those marketplaces connecting two core players, or more.

Network Effects

A network effect is a phenomenon in which as more people or users join a platform, the more the value of the service offered by the platform improves for those joining afterward.

Asymmetric Business Models

In an asymmetric business model, the organization doesn’t monetize the user directly, but it leverages the data users provide coupled with technology, thus have a key customer pay to sustain the core asset. For example, Google makes money by leveraging users’ data, combined with its algorithms sold to advertisers for visibility.

Attention Merchant Business Model

In an asymmetric business model, the organization doesn’t monetize the user directly, but it leverages the data users provide coupled with technology, thus having a key customer pay to sustain the core asset. For example, Google makes money by leveraging users’ data, combined with its algorithms sold to advertisers for visibility. This is how attention merchants make monetize their business models.

Wholesale Business Model

The wholesale model is a selling model where wholesalers sell their products in bulk to a retailer at a discounted price. The retailer then on-sells the products to consumers at a higher price. In the wholesale model, a wholesaler sells products in bulk to retail outlets for onward sale. Occasionally, the wholesaler sells direct to the consumer, with supermarket giant Costco the most obvious example.

Retail Business Model

A retail business model follows a direct-to-consumer approach, also called B2C, where the company sells directly to final customers a processed/finished product. This implies a business model that is mostly local-based, it carries higher margins, but also higher costs and distribution risks.


A B2B2C is a particular kind of business model where a company, rather than accessing the consumer market directly, it does that via another business. Yet the final consumers will recognize the brand or the service provided by the B2B2C. The company offering the service might gain direct access to consumers over time.

Crowdsourcing Business Model

The term “crowdsourcing” was first coined by Wired Magazine editor Jeff Howe in a 2006 article titled Rise of Crowdsourcing. Though the practice has existed in some form or another for centuries, it rose to prominence when eCommerce, social media, and smartphone culture began to emerge. Crowdsourcing is the act of obtaining knowledge, goods, services, or opinions from a group of people. These people submit information via social media, smartphone apps, or dedicated crowdsourcing platforms.

Open-Core Business Model

While the term has been coined by Andrew Lampitt, open-core is an evolution of open-source. Where a core part of the software/platform is offered for free, while on top of it are built premium features or add-ons, which get monetized by the corporation who developed the software/platform. An example of the GitLab open core model, where the hosted service is free and open, while the software is closed.

Open Source vs. Freemium

Open source is licensed and usually developed and maintained by a community of independent developers. While the freemium is developed in-house. Thus the freemium give the company that developed it, full control over its distribution. In an open-source model, the for-profit company has to distribute its premium version per its open-source licensing model.

Freemium Business Model

The freemium – unless the whole organization is aligned around it – is a growth strategy rather than a business model. A free service is provided to a majority of users, while a small percentage of those users convert into paying customers through the sales funnel. Free users will help spread the brand through word of mouth.

Freeterprise Business Model

A freeterprise is a combination of free and enterprise where free professional accounts are driven into the funnel through the free product. As the opportunity is identified the company assigns the free account to a salesperson within the organization (inside sales or fields sales) to convert that into a B2B/enterprise account.

Franchising Business Model

In a franchained business model (a short-term chain, long-term franchise) model, the company deliberately launched its operations by keeping tight ownership on the main assets, while those are established, thus choosing a chain model. Once operations are running and established, the company divests its ownership and opts instead for a franchising model.

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