Seattle customer engagement startup Ambassador has acquired the operating assets of Tacoma-based programmatic ad platform Humming, part of a roll-up strategy that anticipates a larger shakeout among startups as major AI platforms expand their capabilities.
The deal will bring Humming’s technology for automatically buying and placing digital ads into Ambassador’s platform, which uses AI to manage and act on customer referrals, loyalty programs, surveys, and other feedback. Ambassador said the addition will improve its attribution capabilities, connecting ad spending to purchases, leads, and other customer actions.
It’s the latest in a series of acquisitions for the 22-person Seattle company, which has raised about $11 million.
The AI shakeout: Ambassador CEO Geoff McDonald said he sees more opportunities for deals in the future as AI startups that essentially built wrappers around large language models struggle to hold onto customers as Anthropic, OpenAI and others add similar capabilities.
The companies that will succeed, in McDonald’s view, are the ones sitting on years of proprietary customer data that can’t be quickly reproduced, what he calls the context layer.
Ambassador has been accumulating that data since well before the current AI wave, bolstered by its 2021 acquisition of a referral marketing platform from an Apollo Global Management subsidiary. It has since rebuilt the platform around AI.
Customers of relatively native AI startups are increasingly saying, “Oh, well, Claude just came out with this tool. I’m just going to build it internally,” McDonald said, referring to Anthropic’s popular AI assistant. “And I think that’s where we differentiate.”
Latest acquisition: The Humming deal, structured as an asset purchase, closed last week. Financial terms were not disclosed. Humming, founded in 2018, built a platform for buying and managing ad campaigns across websites, apps, and streaming services.
Based in Tacoma, the company was co-founded by Bill Herling and Jill Nealey-Moore, a psychology professor at the University of Puget Sound, and raised more than $5 million, according to Herling’s LinkedIn profile.
The company had more than 30 employees at its peak. Herling stepped down as CEO in 2023 and has since launched a new ad tech startup called Atrium, focused on TV advertising. He is not joining Ambassador, and Humming’s standalone product will be discontinued.
Ambassador expects to integrate Humming’s technology into its platform within 60 days, an accelerated timeline that McDonald attributed to Ambassador’s use of AI in its own engineering process. Chief Operating Officer Mark Steffler said the team has been shipping new features to customers every two weeks, crediting the company’s use of AI coding tools.
Business model: Ambassador has also shifted its approach away from traditional software subscriptions toward what McDonald calls “Results as a Service,” or RaaS — charging customers based on consumption credits tied to outcomes rather than flat fees for seats or contacts.
The model is designed so that customers pay more when the platform delivers more value, and less when it doesn’t. McDonald said he plans to apply the same pricing approach to Humming’s programmatic ad capabilities, which he described as a first for the space.
Zipwhip connection: Ambassador’s chief strategy officer and co-founder is John Larson, who co-founded Seattle-based business texting startup Zipwhip, which Twilio acquired 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 other former Zipwhip execs, calling the company the biggest personal investment of his career.
M&A: Larson said this week that he believes the current environment will produce more acquisition targets. While the “graveyard” of failed AI startups may not be as dire as headlines suggest, many companies with solid teams and technology simply can’t raise money, he said.
Before Humming, the company acquired Predictive Solutions, a Seattle customer data platform, and ChalkLabs, a Spokane-based semantic search startup, before buying the Ambassador referral marketing platform from Intrado, a subsidiary of Apollo Global Management, in 2021.
McDonald, who previously co-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 from the Apollo Global subsidiary.
Customers: Ambassador says it works with more than 200 companies, listing customers 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.
Financials: The privately held company is approaching cash-flow neutral, McDonald said, distinguishing it from many startups that are burning through their funding as they grow.
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