Reddit announced Thursday that it has acquired San Francisco "audience contextualization" startup Spiketrap for an undisclosed amount.
It's Reddit third acquisition in as many months.
In June, Reddit acquired New York-based startup Spell, which improves machine learning experiments at scale. A couple of weeks later, it acquired another East Coast company called MeaningCloud that analyzes data though natural language processing. The details of these deals were also not disclosed.
Spiketrap was founded by CEO Kieran Fitzpatrick, CTO Virgilio Pigliucci and chief scientist Andrea Vattani in 2016, and the company raised $3.7 million through a seed round in 2020 that valued it at more than $12 million, according to PitchBook.
That seed round's investors included 645 Ventures, Anorak Ventures, Oceans Ventures, Pathbreaker Ventures, Susa Ventures, WndrCo, SV Angel and several other individuals.
"The Spiketrap team has joined Reddit and will support and spearhead a number of projects across our ads business" as it heads into "the next phase of our advertising product strategy," Reddit said in a blog post announcing the deal.
Reddit confirmed via email that Spiketrap will merge with Reddit, and the team will take on senior roles within its product and engineering departments.
PitchBook describes Spiketrap as "an artificial intelligence-driven consumer intelligence platform intended to analyze customer behavior" that "uses data analytics and visualizations to find cross-sections of interest and online discussion about games, enabling clients to use the real-time data to make informed decisions, reduce risk, and increase returns."
Companies and brands are increasingly flocking to contextual advertising in the wake of Apple's crackdown on the use of third-party cookies within the iOS ecosystem.
Apple launched what it calls App Tracking Transparency privacy features when it shipped its iOS 14.5 update in April 2021. The update allows Apple users to decline advertising-related tracking by the apps on their devices.
It's a win for user privacy, a win for Apple's own advertising business and a complication for other businesses that have become heavily reliant on targeted advertising over the years. Even Facebook's parent company Meta anticipates a $10 billion hit this year due to the changes, Reuters has reported.
“The richness of conversation within our 100,000+ active communities is what makes Reddit so unique and so valuable for advertisers. We believe targeting relevant audiences based on interests and with the context of the conversations they are engaging in helps ensure advertisers are reaching the right people in the most efficient ways,” said Shariq Rizvi, Reddit executive vice president of ads monetization, in a statement.
