Localized influencer network Hummingbirds has announced a $5.4 million seed round that includes existing and new investors like Allos Ventures and M25 Fund. This brings the company’s funding to date to $10 million by our count, and comes less than a year after its last round of $3.3 million.
Before getting into those drivers and dynamics, what is Hummingbirds? The SaaaS platform connects local influencers with brands that want to reach consumers. That makes it similar to typical influencer networks but with one key distinction: the trust and relevance inherent in local orientation.
In other words, consumers often trust the influencers in their community more so more global or celebrity-based influencers. There’s a certain camaraderie around all things local, which engenders this trust. These are people you may actually see at the grocery store or high-school football game.
“Securing this funding is a clear acknowledgment of the traction we’ve achieved and the impact we’re making for brands and communities alike,” co-founder and CEO Emily Steele told Localogy Insider. “It’s about more than growth — it’s about continuing to refine and expand a model that’s working.”
Prowess & Prevalence
One reason that Hummingbirds has gained traction with this approach is that it’s a well-executed version of a principle that has always driven effective marketing: word of mouth. That axiom is backed up by Nielsen’s claim that 88 percent of consumers trust recommendations from friends over traditional media
Coinciding with that principle are other macro trends. For example, social media has given new prowess and prevalence to influencers as a source of consumer buying decisions. Meanwhile, millennials – a coveted and buying-empowered demographic – spend 2.5 hours per-day on average on social media.
That speaks generally to influencers, but back to the localized approach, Hummingbirds focuses on what it calls nano-influencers. These have fewer than 10,000 followers and often focus on local issues in their social posts (think: PTA moms). That gets back to the local trust factor and word-of-mouth appeal.
Backing that up, Harvard Business Review reports that nano-influencers yield an average $1000 per $50 of brand marketing spend (often through free products given to nano-influencers). That compares with macro-influencers (100,000+ followers) who return $6,000 per $1,000 in brand marketing spend.
Fuel & Fundamentals
Backing up, Hummingbirds’ latest cash infusion is apropos to our coverage, given that we interviewed Steele on stage last spring at the L24 conference on this very topic. Specifically, what are the dynamics of the current VC winter, and what are tactics to get funded in a buyer’s market for startup equity?
Steele recommended at the time that startups prepare for a marathon. The $3.3 million she raised last year required ~100 VC conversations, which yielded four term sheets and one deal. Throughout those conversations, there’s more VC focus on business fundamentals than during the Covid software boom.
For the latest round, Hummingbirds has those fundamentals, doubling its nano-influencers last quarter across 20 cities. The company is also on pace to quadruple revenue this year, working with CPG brands – which pay Hummingbirds for campaign activations – such as Olipop, Godles, Fareway, and ChopLocal.
Building on that momentum, fresh capital should now fuel the fire in terms of geographic expansion, talent, and functional growth. “We’re using these funds to grow our team, enter new markets, and reinvest in the local creators who are the backbone of our platform’s success,” said Steele.
