Snapchat has reportedly been in acquisition talks with AdRoll as part of efforts to grow its ad business and win back investors in the wake of plummeting stock.
According to a report by Business Insider, a “person familiar with the matter” revealed that the San Francisco-based programmatic and retargeting specialist had been in ongoing talks with Snapchat shortly before its March IPO and continued after.
Snapchat recently acquired in-store sale analytics company Placed for a reported price tag of at least $200 million, giving it the arms to measure foot-traffic driven from in-app campaigns.
BI reported the source as saying in regards to Snap’s motives for AdRoll, “They’re looking for some business, or a set of businesses, that can help them demonstrate the efficacy of their ads,” adding that while a number of meetings were held, an offer was never put on the table.
Instead, AdRoll is potentially weighing up a number of other potential acquisition deals with interested parties; the company currently claims to serve over 35,000 customers and has raised over $90 million from investors.
According to BI’s sources, AdRoll is now “borderline profitable” and on track to generate over $300 million in revenue this year.
Snapchat’s scouring the market for new ad tech additions comes with increasing concern among investors over its ability to drive ad revenue, following first-quarter earning results that fell far below par.
The financials, according to Barclays’ Ross Sandler, “were not enough to disprove ‘the Facebook is crushing Snapchat thesis’”, with a number of other analysts agreeing that “fierce” competition from Facebook – and its release of similar products – is hurting Snapchat’s user growth.
A steadily dwindling pool of users means the social media and tech company is under a lot of pressure to prove it can monetise and scale its service effectively, which discussions with AdRoll among other ad techs are demonstrating.