Tech IPOs are making a comeback.
Last month, AI startup Astera Labs and social media site Reddit made successful debuts on the stock market and continue to trade well above their issue prices. Since then, several more tech companies have filed to go public: Ibotta, Reitar Logtech, Rubrik, and NetClass Technology, to name a few.
The biggest two upcoming tech IPOs of the bunch are Colorado-based Ibotta and Microsoft-backed Rubrik. They both said in their SEC filings that they’re looking to raise $100 million each, but they could end up raising a combined $750 million, according to Renaissance Capital.
What’s Rubrik, and how’s it linked to Microsoft?
Rubrik is a data security software company launched in 2014 and backed by Microsoft. Microsoft invested $4 billion in the company in 2021, and Rubrik has committed to spend $220 million over the next decade to use the company’s cloud service Azure.
Like Reddit, AI is part of Rubrik’s business model but not core to it. But while Reddit can make money from AI by licensing its content to makers of large language models, Rubrik actually has an AI product: its chatbot, Ruby.
Even though Ruby isn’t central to Rubrik, the company has its own AI governance committee to mitigate risks associated with any AI tool it’s using or plans to use. TechCrunch writer Anna Heim said Rubrik’s governance committee is an example of how companies and investors are beginning to take precautions with the technology as it comes under increasing regulatory scrutiny.
Rubrik has seen revenue climb and subscriber growth surge 47% year-over-year, but it’s still a money-losing company. The company reported a loss of $354 million in the fiscal year ended Jan. 31 — nearly 30% more than the prior year. While Rubrik’s filing shows plans to raise up to $100 million, the company hasn’t priced its IPO yet, and pre-IPO investment research platform Renaissance Capital says the deal could actually raise up to $500 million. Such a sum would signal that investors have a growing appetite for money-losing companies as the IPO market comes back to life.
What about Ibotta?
Ibotta is a Colorado-based platform that offers cash back, rewards, and discounts on thousands of consumer brands. The company is one of Colorado’s most well known tech firms, according to the Denver Post. And unlike Rubrik, it’s actually making money. Ibotta swung to a profit of $38 million in 2023, after reporting a loss of $55 million the year before.
Its IPO is long-awaited since the company joined the unicorn club in 2019, when it achieved a value of $1 billion.
AI is an arguably larger component of Ibotta’s business than Rubrik’s. The company’s platform relies on AI to ingest retailer data to inform the kinds of consumer rewards it offers, and has an AI tool that generates specific recommendations for what kinds of rewards brands should offer their customers.
Ibotta has partnerships with big names such as Walmart, Dollar Tree, Kroger, Shell, and Exxon — another sign that its money-winning business could keep up its streak.