Gravity, an adtech startup placing ads in chatbots and AI agents, raised a $30.5M Series A co-led by Lightspeed Venture Partners and Committed Capital. Total funding is now $38.5M.
Zach Oldham, cofounder of the adtech startup Gravity, thinks AI ads will eventually become the world's largest advertising channel. His company just secured fresh funds to pursue the opportunity he sees in both ads designed to appeal to humans on AI platforms and those targeted at AI bots themselves.
Gravity told CMO Insider it raised a $30.5 million Series A funding round, co-led by Lightspeed Venture Partners and Committed Capital. The round brings the startup's total funding to $38.5 million.
The company operates what Oldham calls a full-stack ad platform: a demand-side tool that places ads within AI chatbots and agents, a supply-side tool that helps AI developers monetize through ads, and an exchange that connects both sides. It also offers campaign measurement and ad-creation tools.
Text-based ads already run inside several AI chatbots and assistants, including ChatGPT, Codebuff, EcoGPT, Daimon, Magneta, Runable, and CTO.new. Gravity's advertiser clients have included Best Buy, Target, Vercel, and MongoDB.
Gravity is also testing an "agent-to-agent" ad product that human users never see. Advertisers supply their product catalog, including up-to-date features and current promotions.
"Every time the agent is looking for shoes, it's given a list of all the different advertisers we have that are selling shoes," Oldham said. "It's got detailed descriptions and information about them, and it helps enrich the buying decision that way."
Down the road, Gravity plans to integrate direct payment solutions so an agent can complete a purchase once the user gives the go-ahead. Oldham said he hopes that making ads more common within large language models will encourage more AI platforms to keep their services free.
Ad giant WPP Media recently estimated that marketers will spend $100 billion on ads within generative AI search globally by 2030. In April, The Information reported that OpenAI forecast its own ad business alone would reach the $100 billion milestone by 2030.
"I think that even OpenAI is off on their projections," Oldham said. "It is much larger than they realize," he added, referring to the potential size of the AI ad market.
Gravity is a small player in a big market. Google runs the world's largest advertising business. OpenAI has already signed up multiple adtech partners, including Adobe, StackAdapt, and Criteo. Plenty of other large adtech players are also hoping to carve out a position in the space.
Oldham said Gravity's competitive edge is its focus on the AI-native ad format and its role on both the buy and sell sides.
"Because we're owning the full stack, we benefit from true network effects as we scale," Oldham said. "Our network gets smarter every day that goes by."
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