Call it a sign of the times, if you will, but a new mobile savings app called Ibotta has climbed to 100,000 registered users in the first 75 days following its release, despite having done little to no marketing or press. The app has been slowly climbing the charts, as well, reaching the top 75 in the App Store’s “lifestyle” section, and sometimes as high as the top 50, 30, or 20. Today, Ibotta is bringing its same twist on digital couponing to Android.
The app, in fact, ended up on my phone before I was ever introduced to the company founders, when I briefly flirted with the idea that I, too, could become an extreme couponer. While I soon realized that I have nowhere near the time or energy required to devote my life to such an endeavor, Ibotta remained because it’s simply a quick way to earn a little money.
For those unfamiliar, the app works by allowing users to scan their grocery receipts from a large selection of grocery chains as well as big-box stores like Walmart and Target, and pharmacies like Walgreens, RiteAid and CVS. However, unlike competitor Receipt Hog, the company has several established relationships with brands, including those with eight of the world’s 10 largest consumer packaged goods firms. That means it’s able to shell out far more cash back than others because the brands are paying, not the startup. Using the same receipts, for example, I have earned just pennies with Receipt Hog, and dollars at Ibotta.
Of course, working with brands also means they’re dictating what they want users to do, and what hoops they want you to jump through to earn your savings. You can’t simply upload a receipt – thanks for shopping! – and let the cash roll in. Instead, Ibotta presents a selection of items in an attractive (if skeuomorphic) user interface featuring product photos on a virtual, scrollable shelf.
Beneath each item is how much you can earn for purchasing the Listerine mouthwash, Coke Zero, Kellogg’s Raisin Bran, or whatever else strikes your fancy. Each product offers three chances to earn, which include a variety of tasks, such as taking a poll, learning a fact, answering a trivia question, getting a recipe, watching a video (a commercial), or posting to Facebook. Each task provides something like $0.25 to $0.75 in terms of cash back.
You could argue that all these tasks take a bit of time, but in my experience they took far less time than sitting down with the Sunday paper and scissors. I don’t coupon, but I can do this.
And that’s precisely the point, explains Ibotta founder and CEO Bryan Leach, who most recently worked as a trial lawyer, but who grew up in the Internet business, having worked at his father’s tech company, Harbinger Corp., an early leader in EDI, over the years. He says Ibotta’s demographic is 45% those between the ages of 25 and 34, and another 20% between the ages of 15 and 24. “These people are not typically trawling through the newspaper for information about consumer promotions. They’re not following these brands on Facebook…these are not people who clip coupons,” Leach says.
Leach knew to bring in expertise in-house, and has added members to his founding team who know the CPG industry and brands, including Gregory Mann, who has 20 years experience working for Martha Stewart, Avon, Mark Burnett Productions (The Apprentice), Mary Kay, Inc. Russia, and who most recently served as President at TSG, a gourmet food division at Blyth, Inc. The company also stole away six Photobucket engineers, including Luke Swanson, former VP of Engineering at Photobucket, who built the Photobucket/Twitter integration, as well as top mobile and Android engineers. Ibotta is currently a team of fifteen in Denver.
Since its launch on October 1st, over 35 million offers have been viewed, and the company drove 3,000-5,000 video views for select brands, who had gone into partnership with Ibotta with pilot budgets of around $50,000. “For a brand like Simply Orange juice, we had something like a thousand hours of brand engagement on a mobile device, accumulated within a four-week period,” says Leach.
Behind each item on the screen, which users can vote up or down to train the app to their preferences, are another some 15 offers waiting to rotate in. The app tracks not only interactions and taps, but also analyzes grocery purchases on your receipt to better target you with offers you might want.
The company currently has access to some 75 to 80 brands, across major CPG firms, including Coke, Kraft, Kellogg’s, Johnson & Johnson, Pfizer, Colgate, Clorox, WhiteWave, Diamond Foods, and Hain-Celestial. And the company is now in talks to expand beyond CPG to other things, like DVDs. It may also begin to offer additional savings as incentives to shop at particular stores in the future.
Angel investors include Larry Sonsini (who took Apple, Google public; represents Google Ventures; head of top Silicon Valley law firm); Lanny Martin (Head of Platte River Ventures, former CEO of NL Industries, former CEO of TIMET, Lead Director on Board of Halliburton); Tycho Howle (co-founder, Harbinger Corporation, NuBridges); Amit Doshi (former Managing Director, Tiger Global Hedge Fund); Fred Bartlit; Thomas Lehrman (Co-founder, Gerson Lehrman Group); Alston Gardner (Founding Partner of Fulcrum Ventures); Chris Schroeder; Bob Anastasi (Head of Equity Research at Raymond James Investment Bank); Greg Sissel; Jeff Rosensweig; and Josh Funder (GBS Ventures).