Seattle startup gets ad platform Humming, more eyes on deals amid AI shakeout – GeekWire
A Seattle customer engagement startup has acquired the operating assets of Tacoma-based ad platform Humming, part of a merger strategy that anticipates a major shake-up among startups as major AI platforms expand their capabilities.
The deal will bring Humming’s technology for automated buying and digital ad placement to Ambassador’s platform, which uses AI to manage and process customer referrals, loyalty programs, surveys, and other responses. Ambassador said these additions will improve its ability to measure, link ad usage to purchases, leads, and other customer actions.
It’s the latest in a series of acquisitions for the 22-person Seattle firm, which has raised nearly $11 million.
AI development: Ambassador CEO Geoff McDonald said he sees more opportunities for deals in the future as AI startups that integrate big language models struggle to capture customers as Anthropic, OpenAI and others add similar capabilities.
The companies that will succeed, in McDonald’s view, are those that are sitting on years of proprietary customer data that can be quickly generated, what he calls the context layer.
The agency has been collecting that data since before the current AI wave, boosted by its 2021 acquisition of an advertising referral platform from the Apollo Global Management division. It has since rebuilt the platform around AI.
Customers of emerging AI systems are increasingly saying, “Oh, okay, Claude just came out with this tool. I’m going to build it internally,” McDonald said, referring to Anthropic’s popular AI assistant. “And I think that’s where we separate.”
Recent discoveries: The Humming deal, structured as an asset purchase, closed last week. Financial terms were not disclosed. Humming, founded in 2018, builds a platform to buy and manage ad campaigns across websites, apps, and streaming services.
Based in Tacoma, the company was founded by Bill Herling and Jill Nealey-Moore, a psychology professor at the University of Puget Sound, and has raised more than $5 million, according to Herling’s LinkedIn profile.
The company had more than 30 employees at its peak. Herling is stepping down as CEO in 2023 and has even launched a new ad technology program called Atrium, which focuses on television advertising. He is not joining Ambassador, and Humming’s standalone product will be discontinued.
Ambassador expects to integrate Humming’s technology into its facility within 60 days, an accelerated timeline that McDonald attributes to Ambassador’s use of AI in its engineering program. Chief Operating Officer Mark Steffler said the team was shipping new features to customers every two weeks, touting the company’s use of AI coding tools.
Business model: The agency also shifted its approach from traditional software subscriptions to what McDonald calls “Results as a Service,” or RaaS — charging customers based on usage credits tied to results rather than lower costs for seats or contacts.
The model is designed so that customers pay more if the platform delivers great value, and less if it doesn’t. McDonald said he plans to apply a similar pricing strategy to Humming’s advertising capabilities, which he describes as the first in the space.
zipwp connection: Ambassador’s chief strategy officer and co-founder is John Larson, who founded Seattle-based startup Zipwhip, which Twilio will acquire for $850 million in 2021. He spent three years at Twilio after the deal before joining Ambassador full-time in mid-2024.
He was part of a $7 million funding round in December that included former Zipwhip executives, calling the company his biggest investment of his career.
M&A: Larson said this week that he believes the current situation will generate more acquisition targets. While the “graveyard” of failed AI startups may not be as bad as the headlines suggest, many companies with strong teams and technology are unable to raise capital, he said.
Prior to Humming, the company acquired Predictive Solutions, a Seattle-based customer data platform, and ChalkLabs, a Spokane-based search engine startup, before purchasing referral marketing platform Ambassador from Intrado, a subsidiary of Apollo Global Management, in 2021.
McDonald, who founded Seattle startup Element Data, a decision intelligence platform, launched the company as i2H in 2019. The holding company began doing business under the Ambassador name after completing the acquisition of a subsidiary of Apollo Global.
Customers: The embassy says it works with more than 200 companies, listing clients including Visible by Verizon, Canadian bank CIBC, and HR software company Rippling on its website. Its customers are primarily in telecom, financial services, and B2B software.
Finance: The privately held company is nearing revenue streams, McDonald said, setting it apart from many startups that burn through their funding as they grow.
