Des Moines, Iowa-based digital agency Hummingbirds, which has innovated a hyperlocal twist on influencer marketing, announced that it has raised a $3.3 million venture round.
This new investment comes almost exactly one year after Hummingbirds announced an initial $1 million funding round.
We caught up today with Hummingbirds Co-founder and CEO Emily Steele to learn more about the raise and what it means to the company she launched with COO Charise Flynn in 2022.
Hummingbirds is a unique player on the local landscape. Essentially the company rolls out market by market, aggregating local content creators (called Hummingbirds) who promote products to their local followers.
For a complete explanation of how Hummingbirds works, we suggest that you listen to our This Week in Local podcast interview with Steele.
Hummingbirds Are Not Kardashians
While the intersection with influencer marketing seems clear, Hummingbirds is a bit resistant to the influencer label. It even has a page on its website titled, “How Hummingbirds is different than influencer marketing platforms”.
For example, “Influencer marketing platforms and agencies typically have a library of influencers that they work with. When a brand approaches them, they will reach out to the influencers to see if they can secure a sponsored post or two for the brand.
“In contrast, Hummingbirds is a digital platform that connects brands with local people in their target locations who have already expressed interest in creating content for the brand.”
Investors Back for More
The new raise features many of the same investors from Hummingbirds’ initial $1 million venture round. And there has been a decidedly Midwest flavor to the names getting behind Hummingbirds.
The new round is led by Indianapolis venture firm Ground Game. Also participating are Allos Ventures, FJ Labs, as well as Midwest-based individual investors, including Des Moines investor Tej Dhawan, who participated in both rounds.
A Ground Game partner said the firm was drawn to Hummingbird’s uniqueness and its human-centered approach to marketing.
“Emily, Charise, and the Hummingbirds team are crafting something truly extraordinary for businesses with their technology platform,” says Aman Brar, a founding partner of Ground Game.
“Authentic, community-driven human connection matters more than ever, and Hummingbirds rapid growth and profound customer impact reinforce this unmet need in the market. We are thrilled to back these exceptional founders on their mission to enable hyperlocal growth through their innovative software.”
Investors who participated in both venture rounds include Chicago-based M25, which led the first round, Next Level Ventures, innoVentures Iowa, ISA Ventures, and Mango Seed Investments.
“It’s incredibly positive to have all of our investors back in the round,” Steele said. “Along with new investors that offer different value.”
Accelerating Expansion
Steele told us the money will be used in ways most startups use funding – to improve their tech and accelerate expansion.
“We will be opening up two to three times the cities we are in this year and continuing to improve the platform,” Steele told Localogy Insider. “We’ll have more concrete features and roadmap announcements as we bring the tech team all in-house.”
This year, Hummingbirds expanded from just three cities to 14 across the Midwest. Mid-size and Midwestern cities like Des Moines, Milwaukee, and Indianapolis appear to be Hummingbirds’ sweet spot.
Steele said this latest round should carry Hummingbirds through the next couple of years. Then the company will likely need to raise a Series A.
“We could have gone a little longer or not grown our team as rapidly and been more conservative, but we found that the more cities we opened, the more we could fulfill demand,” Steele said.
“So we raised capital because this demand has gotten so significant and because we are truly onto something. Brands have such limited options when it comes to local advertising in a way that reaches today’s consumers, and we have an incredibly sticky/proud community of ‘hummingbirds’ (our content creators). We will likely raise a Series A in the next couple of years to continue expansion.”
Yes, It is Tough Out There
Steele also underscored the conventional narrative that it’s tough out there for startups raising capital right now. And it is that much harder for female founders based in the Midwest who do not have MBA or engineering degrees from Stanford.
“It’s a really rough environment to raise. You need traction, not ideas at this stage to get funding — especially if you’re not a ‘typical’ founder profile,” Steele said. “We’re two women founders based in Iowa. And with 2% to 3% of VC dollars going to people like us, we knew we had challenges around that. But the traction speaks for itself. So we ended up with multiple terms sheets to make a decision that felt best for the company.”
Steele said the company has done in a year what many startups fail to do in their first three. She says Hummingbirds is approaching $1 million in recurring revenue. She said Hummingbirds is working with some recognized brands. But it’s important to maintain a balance between brands and truly local businesses.
“Our customers aren’t necessarily flashy and that’s by nature. Local people are looking for local things to do,” Steele said.
“So we don’t want to have a platform that’s only showing enterprise companies or CPG brands, for example. They mix in well, but we’d lose the local flavor that really sets us apart. We have done some exciting campaigns with Hy-Vee, Warner Brothers, and some established multi-location companies/franchises like Waxing the City.”
