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Investment
We’re excited to welcome Kontext. Kontext is co-founded by Andrej Kiska (formerly of Credo Ventures) and works with early customers like Amazon, Netease and Canva, to redefine ad formats that target any audience or context and a ChatGPT-like environment that gives valuable insights and relevant ads. Kontext closed a $10 million seed round led by M13, with participation from Torch Capital, Parable Partners and Credo Ventures.
Why we’re excited about Kontext
Depending on who you ask, the advertising industry is not in a good place. To quote a recent Forbes article, “the ad industry isn’t dying — it’s killing itself.” How? Playing it safe by only following the data, increased consumer distrust and forgettable brands, to name a few reasons.
There was a heyday for advertising years ago. That’s when streaming companies, like Netflix, promised ad-free services, and ad blockers for the web were doing well.
Then came streaming services with higher prices to continue ad-free, and seeing one-off internet searches memorialized in advertisements on every website for days after.
That said, the advertising industry is poised to top $1 trillion in revenue in 2025, with digital advertising predicted to account for nearly three-quarters of total advertising.
Kontext is out to change the way those advertising dollars will come in through large language models that provide myriad ad formats an advertiser needs, from search to chatbots. They are building the largest AI-native ad network for the future of advertising.
What excites M13 about Kontext is not just the technology, but the timing.
In the evolution of digital advertising, context matters
Historically, digital ads have relied heavily on behavioral targeting — tracking users across browsing sessions and displaying ads based on demographic or inferred interests.
This approach, while lucrative for a time, increasingly annoys users and degrades trust in advertising. Banner blindness, ad fatigue and privacy backlash have become all-too-common challenges for modern marketers.
In addition, for the past 15 years, digital advertising was defined by two dominating ecosystems: search (Google) and social (Meta/Facebook, Snap, TikTok). Now we are witnessing the rise of generative AI platforms and conversational interfaces.
Instead of invasive behavioral tracking, Kontext’s platform analyzes the context of user interactions in real time, Kontext founder Andrej Kiska said.
For chatbots and GenAI-powered apps, this means understanding what the user is talking about in a specific session, and serving up a relevant, useful and native-feeling ad right then. It’s never before or after, and never based on a noisy history.
This approach aligns ads with genuine user intent, restoring value for advertisers while keeping the user experience seamless, Kiska said.
“The basic pitch to advertisers is, ‘here's the new way people spend their time. Your brand should be visible there, and we are the company that allows your brand to be visible in these cool new ways,’” he said.
How Kontext powers native advertising in generative AI chatbots
One of the weaknesses in behavioral targeting of advertising is that even if you have already made the purchase, your website experience is plagued with banner ads for the very thing you just bought. For example, if you just purchased cowboy boots, all other cowboy boots companies targeting you with ads are wasting their money.
“That speaks to the inefficiencies of trying to track a user across the entire internet, yet doing a very poor job at it, versus being able to target the user based on the intent with which he's talking to with the chat bot,” Kiska said.
He also notes that the banner ads themselves are “ugly.” Very few people complain about ads on sites like Instagram, Facebook or TikTok. Why? Instead of being “in your face,” the ads “are very naturally stitched into the user experience of the consumer application,” Kiska said.
Integrating Kontext is straightforward for publishers. AI chatbot or GenAI app developers add the Kontext software development kit. Every ad is generated on the fly and tailored to the context of the conversation with no reliance on historic behavioral data. That enables Kontext to automatically bring advertisers, ad formats and the infrastructure for monetization.
For advertisers, Kontext offers a dashboard where they specify outcomes: number of impressions, desired actions (clicks, installs, purchases), and a description of the product. The system then generates creatives in real time, perfectly matching each user interaction.
This real-time, context-first model accomplishes what earlier ad tech never could: align monetization with the conversational flow, ensuring minimal churn, high relevance and preserved user retention.
The ad format can be tailored to each website so it fits the user experience and doesn't have to target you with all behavioral data, Kiska said.
“It can do a very good job with contextual targeting as well where it's helpful,” he said. “We are making the ads on what we call the ‘open web’ hopefully be as pleasant as the ads on Facebook or Instagram.”
Adopting a new ad approach: why contextual ads outperform behavioral targeting in AI apps
What makes Kontext different from traditional ad tech? It doesn’t rely on demographic targeting or behavioral history. Kontext aligns ads with real-time conversational context in AI interfaces, improving user experience and advertiser ROI.
Kontext’s early customer base already features blue-chip brands like Amazon, Netease and Canva. Publishers report that ads delivered via Kontext are not only more tolerable but actually helpful, integrated into the conversational journey instead of interrupting it, Kiska said.
Yet, one of the toughest challenges for Kontext was not just building the tech, but convincing GenAI consumer companies — many with no experience in digital ads — to adopt a new approach.
“The trickiest part is convincing them that it is actually a good idea to have ads,” Kiska said. “You always see this when there is a new set of consumer companies or even mobile casual games. Nobody wants to have ads.”
He recalls the days when consumers would pay 99 cents for a mobile game, and that would be the extent to which the developer monetized. Over time, more and more developers realized that advertising was actually a more effective model for monetization, he said.
“Advertisers are always on the lookout for the new sexy advertising surfaces where their brands can be shown,” Kiska said. “Our main job is convincing the GenAI consumer companies that it makes sense to run ads and that it doesn't cost churn, it doesn't cause user annoyance and if you unlock enough new impressions and new surface area where to serve ads, all the advertisers will follow.”
What is the third wave of digital advertising?
Prior to creating Kontext, Kiska was working as a startup investor at early-stage venture capital fund Credo Ventures for over 10 years. At one point, he decided to try “the other side,” as an entrepreneur, he said.
Kontext came about when one of his friends approached Kiska with a generative AI consumer application that resembled a Character AI clone. The friend asked Kiska how to monetize it, and he replied to put ads on it.
“He replied that because banners look ugly, it will destroy retention,” Kiska said. “So we took a closer look at this, and I realized that every time there is a platform shift in how people consume content online, there are typically new ad formats invented around the ways people consume content online.
“Then there's typically a new ad tech company that dominates that ad format,” he said. “Just like AppLovin did for mobile casual games, we hope to do the same for genAI consumer companies.”
It’s a good time for Kontext to be here. The digital advertising landscape is in the midst of a generational transformation, and two macro-trends are converging:
- Changing consumer behavior: Users are shifting from search and social feeds to AI-powered interfaces, including chatbots, GenAI tools, and conversational assistants.
- Erosion of traditional targeting: Users and regulators are increasingly hostile to invasive data tracking. Privacy-first, context-based solutions are in demand.
M13 Partner Brent Murri and team foresaw the “third wave of ad tech” as a major macrotrend before meeting Kontext. Murri’s team had been exploring the advertising space for some time and recognized that it was at the start of a third major transformative wave.
The first one happened in the early 2000s when companies, like Google, invented a new inventory.
“For the first time, there was a digital marketing landscape where not only could advertisers start advertising on Google results page, but Google allowed other web pages to have that same technology,” Murri said. “All of a sudden, there's this inventory that sprang up out of nowhere: a digital ad space. Advertisers love that.”
A decade later, the second big wave hit in the 2010s, with social media companies, including Facebook, Snap and TikTok.
“Now the eyeballs shifted from just these web pages to these social media platforms, and they became the new advertising giants,” Murri said. With that came another new inventory in the way of Reels, Pages, and Stories to advertise on.
“It's our belief that because generative AI allows the democratization of creating new consumer apps, companion apps, gaming apps and search engines, that that is the next wave of where human eyeballs are going, and it's unplanned space,” Murri said.
That unplanned space is what attracted Murri and M13 to what Kontext was doing. They didn’t see any much in the way of other technologies that targeted consumers based on a query into the large language model. That, in turn, provides a totally different chat experience with an AI component app in a way that is organic and contextual, Murri said.
“We think we're at the beginning of a third wave, and Kontex is well positioned for that,” he said. “The actual product is a perfect solution for generative AI because the existing solutions either target you based on purchase history online, or they know your demographic — where you fit and how similar audiences behaved.”
Why M13 invested in Kontext’s AI-first advertising platform
Kontext’s partnership with M13 was the result of both sides bringing deep sector knowledge and operational rigor to the table. From their first meeting, Kiska was struck by the preparedness and insight of the M13 team.
“They knew the space really well and built out the thesis for the space before we met them,” Kiska said. “They met with other adtech players and with our publishers, so the amount of knowledge they had about our space by the time we met with them was very impressive. It was probably the best one we have seen from any pitch. It was a fairly easy pick for us, to be honest.”
He also liked that during the welcome session, the M13 team asked what three goals Kontext needed to achieve to raise a Series A, then drilled into describing those and making sure the entire operating team was on the same page.
For Murri, the decision was equally clear. “Not only did Andrej and team understand ad technology, they understand the nuances behind ad tech. We think there's going to be a long tail of publishers to advertise on them, and publishers will like Kontext because they will see their competitors treating all of them equal instead of a product that will tell them specifically where to advertise to avoid wasting time on apps that aren't going to exist in the year.”
The future of ad tech: privacy, context, and generative AI
Meanwhile, digital advertising isn’t going away, but bad ads are. Kontext and M13 are betting on the new era: one where context drives relevance, where ads are as helpful as content and publishers finally have a model that benefits everyone — without compromising experience or ethics.
As the generative AI revolution accelerates, Kontext is ready to power the next generation of digital interactions.
Read more about Andrej Kiska
How Advertising Will Forever Change with LLMs
https://www.linkedin.com/in/kiskandrej/
Follow Kontext
Investment
We’re excited to welcome Kontext. Kontext is co-founded by Andrej Kiska (formerly of Credo Ventures) and works with early customers like Amazon, Netease and Canva, to redefine ad formats that target any audience or context and a ChatGPT-like environment that gives valuable insights and relevant ads. Kontext closed a $10 million seed round led by M13, with participation from Torch Capital, Parable Partners and Credo Ventures.
Why we’re excited about Kontext
Depending on who you ask, the advertising industry is not in a good place. To quote a recent Forbes article, “the ad industry isn’t dying — it’s killing itself.” How? Playing it safe by only following the data, increased consumer distrust and forgettable brands, to name a few reasons.
There was a heyday for advertising years ago. That’s when streaming companies, like Netflix, promised ad-free services, and ad blockers for the web were doing well.
Then came streaming services with higher prices to continue ad-free, and seeing one-off internet searches memorialized in advertisements on every website for days after.
That said, the advertising industry is poised to top $1 trillion in revenue in 2025, with digital advertising predicted to account for nearly three-quarters of total advertising.
Kontext is out to change the way those advertising dollars will come in through large language models that provide myriad ad formats an advertiser needs, from search to chatbots. They are building the largest AI-native ad network for the future of advertising.
What excites M13 about Kontext is not just the technology, but the timing.
In the evolution of digital advertising, context matters
Historically, digital ads have relied heavily on behavioral targeting — tracking users across browsing sessions and displaying ads based on demographic or inferred interests.
This approach, while lucrative for a time, increasingly annoys users and degrades trust in advertising. Banner blindness, ad fatigue and privacy backlash have become all-too-common challenges for modern marketers.
In addition, for the past 15 years, digital advertising was defined by two dominating ecosystems: search (Google) and social (Meta/Facebook, Snap, TikTok). Now we are witnessing the rise of generative AI platforms and conversational interfaces.
Instead of invasive behavioral tracking, Kontext’s platform analyzes the context of user interactions in real time, Kontext founder Andrej Kiska said.
For chatbots and GenAI-powered apps, this means understanding what the user is talking about in a specific session, and serving up a relevant, useful and native-feeling ad right then. It’s never before or after, and never based on a noisy history.
This approach aligns ads with genuine user intent, restoring value for advertisers while keeping the user experience seamless, Kiska said.
“The basic pitch to advertisers is, ‘here's the new way people spend their time. Your brand should be visible there, and we are the company that allows your brand to be visible in these cool new ways,’” he said.
How Kontext powers native advertising in generative AI chatbots
One of the weaknesses in behavioral targeting of advertising is that even if you have already made the purchase, your website experience is plagued with banner ads for the very thing you just bought. For example, if you just purchased cowboy boots, all other cowboy boots companies targeting you with ads are wasting their money.
“That speaks to the inefficiencies of trying to track a user across the entire internet, yet doing a very poor job at it, versus being able to target the user based on the intent with which he's talking to with the chat bot,” Kiska said.
He also notes that the banner ads themselves are “ugly.” Very few people complain about ads on sites like Instagram, Facebook or TikTok. Why? Instead of being “in your face,” the ads “are very naturally stitched into the user experience of the consumer application,” Kiska said.
Integrating Kontext is straightforward for publishers. AI chatbot or GenAI app developers add the Kontext software development kit. Every ad is generated on the fly and tailored to the context of the conversation with no reliance on historic behavioral data. That enables Kontext to automatically bring advertisers, ad formats and the infrastructure for monetization.
For advertisers, Kontext offers a dashboard where they specify outcomes: number of impressions, desired actions (clicks, installs, purchases), and a description of the product. The system then generates creatives in real time, perfectly matching each user interaction.
This real-time, context-first model accomplishes what earlier ad tech never could: align monetization with the conversational flow, ensuring minimal churn, high relevance and preserved user retention.
The ad format can be tailored to each website so it fits the user experience and doesn't have to target you with all behavioral data, Kiska said.
“It can do a very good job with contextual targeting as well where it's helpful,” he said. “We are making the ads on what we call the ‘open web’ hopefully be as pleasant as the ads on Facebook or Instagram.”
Adopting a new ad approach: why contextual ads outperform behavioral targeting in AI apps
What makes Kontext different from traditional ad tech? It doesn’t rely on demographic targeting or behavioral history. Kontext aligns ads with real-time conversational context in AI interfaces, improving user experience and advertiser ROI.
Kontext’s early customer base already features blue-chip brands like Amazon, Netease and Canva. Publishers report that ads delivered via Kontext are not only more tolerable but actually helpful, integrated into the conversational journey instead of interrupting it, Kiska said.
Yet, one of the toughest challenges for Kontext was not just building the tech, but convincing GenAI consumer companies — many with no experience in digital ads — to adopt a new approach.
“The trickiest part is convincing them that it is actually a good idea to have ads,” Kiska said. “You always see this when there is a new set of consumer companies or even mobile casual games. Nobody wants to have ads.”
He recalls the days when consumers would pay 99 cents for a mobile game, and that would be the extent to which the developer monetized. Over time, more and more developers realized that advertising was actually a more effective model for monetization, he said.
“Advertisers are always on the lookout for the new sexy advertising surfaces where their brands can be shown,” Kiska said. “Our main job is convincing the GenAI consumer companies that it makes sense to run ads and that it doesn't cost churn, it doesn't cause user annoyance and if you unlock enough new impressions and new surface area where to serve ads, all the advertisers will follow.”
What is the third wave of digital advertising?
Prior to creating Kontext, Kiska was working as a startup investor at early-stage venture capital fund Credo Ventures for over 10 years. At one point, he decided to try “the other side,” as an entrepreneur, he said.
Kontext came about when one of his friends approached Kiska with a generative AI consumer application that resembled a Character AI clone. The friend asked Kiska how to monetize it, and he replied to put ads on it.
“He replied that because banners look ugly, it will destroy retention,” Kiska said. “So we took a closer look at this, and I realized that every time there is a platform shift in how people consume content online, there are typically new ad formats invented around the ways people consume content online.
“Then there's typically a new ad tech company that dominates that ad format,” he said. “Just like AppLovin did for mobile casual games, we hope to do the same for genAI consumer companies.”
It’s a good time for Kontext to be here. The digital advertising landscape is in the midst of a generational transformation, and two macro-trends are converging:
- Changing consumer behavior: Users are shifting from search and social feeds to AI-powered interfaces, including chatbots, GenAI tools, and conversational assistants.
- Erosion of traditional targeting: Users and regulators are increasingly hostile to invasive data tracking. Privacy-first, context-based solutions are in demand.
M13 Partner Brent Murri and team foresaw the “third wave of ad tech” as a major macrotrend before meeting Kontext. Murri’s team had been exploring the advertising space for some time and recognized that it was at the start of a third major transformative wave.
The first one happened in the early 2000s when companies, like Google, invented a new inventory.
“For the first time, there was a digital marketing landscape where not only could advertisers start advertising on Google results page, but Google allowed other web pages to have that same technology,” Murri said. “All of a sudden, there's this inventory that sprang up out of nowhere: a digital ad space. Advertisers love that.”
A decade later, the second big wave hit in the 2010s, with social media companies, including Facebook, Snap and TikTok.
“Now the eyeballs shifted from just these web pages to these social media platforms, and they became the new advertising giants,” Murri said. With that came another new inventory in the way of Reels, Pages, and Stories to advertise on.
“It's our belief that because generative AI allows the democratization of creating new consumer apps, companion apps, gaming apps and search engines, that that is the next wave of where human eyeballs are going, and it's unplanned space,” Murri said.
That unplanned space is what attracted Murri and M13 to what Kontext was doing. They didn’t see any much in the way of other technologies that targeted consumers based on a query into the large language model. That, in turn, provides a totally different chat experience with an AI component app in a way that is organic and contextual, Murri said.
“We think we're at the beginning of a third wave, and Kontex is well positioned for that,” he said. “The actual product is a perfect solution for generative AI because the existing solutions either target you based on purchase history online, or they know your demographic — where you fit and how similar audiences behaved.”
Why M13 invested in Kontext’s AI-first advertising platform
Kontext’s partnership with M13 was the result of both sides bringing deep sector knowledge and operational rigor to the table. From their first meeting, Kiska was struck by the preparedness and insight of the M13 team.
“They knew the space really well and built out the thesis for the space before we met them,” Kiska said. “They met with other adtech players and with our publishers, so the amount of knowledge they had about our space by the time we met with them was very impressive. It was probably the best one we have seen from any pitch. It was a fairly easy pick for us, to be honest.”
He also liked that during the welcome session, the M13 team asked what three goals Kontext needed to achieve to raise a Series A, then drilled into describing those and making sure the entire operating team was on the same page.
For Murri, the decision was equally clear. “Not only did Andrej and team understand ad technology, they understand the nuances behind ad tech. We think there's going to be a long tail of publishers to advertise on them, and publishers will like Kontext because they will see their competitors treating all of them equal instead of a product that will tell them specifically where to advertise to avoid wasting time on apps that aren't going to exist in the year.”
The future of ad tech: privacy, context, and generative AI
Meanwhile, digital advertising isn’t going away, but bad ads are. Kontext and M13 are betting on the new era: one where context drives relevance, where ads are as helpful as content and publishers finally have a model that benefits everyone — without compromising experience or ethics.
As the generative AI revolution accelerates, Kontext is ready to power the next generation of digital interactions.
Read more about Andrej Kiska
How Advertising Will Forever Change with LLMs
https://www.linkedin.com/in/kiskandrej/
Follow Kontext
Read more
The views expressed here are those of the individual M13 personnel quoted and are not the views of M13 Holdings Company, LLC (“M13”) or its affiliates. This content is for general informational purposes only and does not and is not intended to constitute legal, business, investment, tax or other advice. You should consult your own advisers as to those matters and should not act or refrain from acting on the basis of this content. This content is not directed to any investors or potential investors, is not an offer or solicitation and may not be used or relied upon in connection with any offer or solicitation with respect to any current or future M13 investment partnership. Past performance is not indicative of future results. Unless otherwise noted, this content is intended to be current only as of the date indicated. Any projections, estimates, forecasts, targets, prospects, and/or opinions expressed in these materials are subject to change without notice and may differ or be contrary to opinions expressed by others. Any investments or portfolio companies mentioned, referred to, or described are not representative of all investments in funds managed by M13, and there can be no assurance that the investments will be profitable or that other investments made in the future will have similar characteristics or results. A list of investments made by funds managed by M13 is available at m13.co/portfolio.