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Hyp3r is planning talks with Facebook after ad start-up was booted from Instagram

Key Points
  • Facebook is setting up a meeting with Hyp3r, a marketing firm that was removed from Instagram after allegedly violating the social network's policies.
  • Hyp3r has also decided to take its services offline for now, a board member said on a call with investors.
  • Hyp3r created tools that allowed it to collect public Instagram data, including users posts, profile information and locations they visited.
Facebook CEO Mark Zuckerberg
Marlene Awaad | Bloomberg | Getty Images

Hyp3r, the ad start-up that was removed from Instagram for creating tools to collect public data from the photo app, is planning to meet with Facebook as soon as next week, a Hyp3r board member told investors on a call, which CNBC heard.

According to a story published by Business Insider on Wednesday, Hyp3r was collecting user data in violation of Facebook's policies. Hyp3r was able to pull together information from user posts, profiles and locations that people visited, data that could then be used for targeted advertisements.

Since its removal, Hyp3r and its advisors have contacted Facebook employees to schedule a meeting with the social network. Jeff Ransdell, a Hypr3r investor and board member told limited partners of his venture firm Rokk3r Fuel in a phone call Thursday evening that Facebook emailed the company earlier in the day agreeing to a meeting.

"We have leveraged our relationships in a very intelligent way to have a conversation, and we now have a scheduled meeting to sit down with the powers that be at Facebook to have a discussion around what has transpired," Ransdell said on the call. The meeting will likely take place early next week, he said.

In the meantime, Hyp3r's board made the decision to take the company's platform offline, at least until the two companies meet, Ransdell said.

"It will remain offline until that meeting has taken place and until we can come to a consensus as to how we work together moving forward," he said.

Rokk3r Fuel Exo is a venture capital firm based in Miami. The firm participated in Hyp3r's $17.3 million funding round announced in September 2018. Other investors included Structure Capital, Thayer Ventures and Silicon Valley Bank.

Ransdell defended Hyp3r's data collection practices, telling investors that the start-up had not done anything wrong or illegal.

"Basically what has happened is that the machine which is Facebook has kicked into gear," Ransdell said. "The machine went into place and did what it needed to do to protect its own shareholders and its company."

Facebook and Hyp3r did not respond to requests for contact.

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