Snap, the parent company that owns Snapchat, has acquired San Francisco-based ad tech company Flite, according to multiple sources familiar with the deal.
It’s unknown how much Snap is paying for Flite, but one source described the deal as an “acqhire,” meaning it was likely more about bringing in ad tech talent than any specific technology itself.
Flite’s ad products are primarily focused on content creation, according to its website. That means tools to make compelling digital ads, like 360-degree video ads and vertical video ads that make sense for a smartphone. (Snapchat, which runs a lot of vertical video ads, is credited with bringing this ad type mainstream.)
Snap is entering an important stretch for the company, especially when it comes to ad tech. Snap has confidentially filed paperwork for an IPO, which could come as soon as March, and its ads API, which will let marketers automate their ad buys using bidding algorithms, will likely be a major revenue driver once it’s up and running. (Snap just rolled it out this fall.) Other major digital ad players like Facebook, Google and Twitter all offer similar APIs for advertisers.
Snap is on pace to surpass its $350 million revenue goal for 2016, according to multiple sources, and some investors believe the company will be a $1 billion business in 2017. That’s almost triple the sales total Snapchat had this year, so automating those sales with ad technology — and teaching advertisers how to create Snapchat ads — will likely be a big part of that growth.
A Snap spokesperson declined to comment. Flite did not immediately return a request for comment. Flite has taken money from a number of venture capital firms over the past decade, including Sequoia Capital and General Catalyst.