Govtech: is the Industry at an Inflection Point?

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Is

Govtech: is the Industry at an Inflection Point?

Christine Suh-‐Yeon Hong Stanford Graduate School of Business Independent Research

An Industry Primer June 2016

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Acknowledgements I deeply thank Stanford Graduate School of Business faculty and McKinsey Director Emeritus Lenny Mendonca for advising the independent research. I am also grateful to Co-‐Founder of Textizen Alex Yule, Altos Ventures Managing Director Ho Nam, Knight Foundation Director Jonathan Sotsky, Chief Financial Officer of Accela Maximilian Schnoedl, FuseCorps Fellow Robert Henning, Govtech Fund Managing Partner Ron Bouganim, Innovation Endeavors Investment Partner Scott Brady, Chief Executive Officer of GovDelivery Scott Burns, Omidyar Network Investment Partner Stacy Donohue, and Chief Executive Officer of OpenGov Zachary Bookman for providing valuable input and counsel.

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Executive Summary The govtech space has been growing quickly in the past years, driven by changes in the government, companies, and investors. Governments at the federal and local level are embracing technology and reforming how they work with technology companies. Govtech focused companies are emerging, while existing companies are accelerating growth through acquisitions. Larger tech players are also moving into this space. Traditional venture capital is flowing into earlier stage govtech companies, indicating a new growth model of venture backed growth in the industry. However, in order for the industry reach an inflection point, three mutually reinforcing factors must come into play: governments need to become better buyers, credible investors need to make big bets, and more companies need to grow and exit successfully.

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Introduction The government technology (“govtech”) industry is an emerging ecosystem that has the potential to transform governments. Govtech companies like Accela, GovDelivery, and Granicus have scaled sustainably for nearly two decades. A number of govtech companies have also risen to prominence in the last few years. For example, OpenGov – a company that aims to increase governments’ financial intelligence and transparency through web based visualization software – raised $47 million in funding from venture capital firms like Andreessen Horowitz. Do these increased market signals indicate an inflection point of the industry, which could accelerate public sector transformation? The paper aims to map out the ecosystem and provide a quantitative understanding of its growth trajectory by answering the following four questions:

1. What is the definition of govtech? 2. What does the ecosystem look like? 3. How is the ecosystem changing? 4. What factors will accelerate market take-‐off?

In order to answer these questions, experts in the biggest govtech companies, the venture capital community, government and opinion leaders were interviewed. Moreover, the paper selected 98 of the most notable govtech companies in United States based on sources like Govtech.com’s Govtech 100 list, and tracked their private capital deal flows from 2004 to 2015. Details of the Deal Flow Database and the methodology are in the appendix.

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1. What is the definition of govtech? Govtech is defined as “the technology infrastructure that governments use to manage internal operations and deliver services to its citizens.i” Operations and services include various functions such as permitting, pension management, tax collection, and budgeting. Companies in the gov tech space are firms that “have state, local, and federal government as their primary market focus and derive the majority of their revenues from the public sectorii” In literature, the term govtech is often used interchangeably with civic tech. The industry does not have a standardized definition of the two terms. The following exhibit illustrates the varying definitions among the industry’s opinion leaders.

The paper defines govtech and civic tech as two different spheres, although companies may operate in both spaces.

• Govtech companies primarily focus on the operations of the city, state, and local governments. OpenGov would be a prime example. Govtech companies also include technologies that help governments interact better with citizens. The primary customer of the products and services are governments. For example, GovDelivery – a company that allows 1,800 government organization to reach over 130 million people through digital

De#initions)of)govtech)and)civic)tech)vary)within)the)industry)

Chris&ne)Hong)

Govtech( Civic(Tech(

!  The)technology)infrastructure)that)government)departments)use)to)do)their)internal)work)of)deliver)services)to)their)“customers”)(i.e.)citizens).)It)is)the)“operating)system”)of)the)government)

!  The)tools)citizens)use)everyday)to)engage)in)their)governance.)It)covers)a)broad)range)of)citizen)engagement)and)personal)democracy)related)activities,)including)community)organizing,)petitions,)advocacy,)politics,)campaigns,)and)etc)

!  Govtech)companies)are)#irms)that)have)state,)local,)and)federal)government)as)their)primary)market)focus)and)derive)the)majority)of)their)revenues)from)the)public)sector.))

!  Civic)tech)is)one)of)the)four)domains)under)the)four)govtech)domains)

!  Technology)that)is)used)to)empower)citizens)or)help)make)government)more)accessible,)ef#icient)and)effective)

!  Govtech)is)an)umbrella)term)under)civic)tech)

Source:))1)Ron)Bougham,)“Govtech:)the)$400)Billion)market)hiding)in)plain)sight.”)Govtechfund.com)(http://Govtechfund.com/2016/01/GovtechQtheQ400QbillionQmarketQhidingQinQplainQsight/))2)Dustin)Haisler,)Chief)Innovation)Of#icer)“Govtech)Market)Snapshot”)e.Republic)(www.slideshare.net/dustinhaisler/s2Qgv5))3)Stacy)Donohue,)“Civic)Tech)is)Ready)for)Investment”)TechCrunch,)Apr)2015))(http://techcrunch.com/2015/04/29/civicQtechQisQreadyQforQinvestment/#.ynhb4m:X2B8))4)Johnathan)Sotsky,)“Five)lessons)from)investing)in)civic)tech,”)Knight)Foundation)blog,)Apr)2015)(http://www.knightfoundation.org/blogs/knightblog/2015/4/21/#iveQlessonsQinvestingQcivicQtech/))

!  Technology)that)spurs)citizen)engagement,)increase)government)effectiveness)and)strengthen)cities)

!  Govtech)is)an)umbrella)term)under)civic)tech)

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channels like email, text, and social communication – would be considered a govtech company.

• Civic tech is defined as technology that connects and empowers citizens. The category would include elections, peer-‐to-‐peer interactions, community organizing and etc. Companies like Change.org, a petition website that provides a tool to advance social causes, would be considered a civic tech company rather than govtech company. Civic tech also includes technologies that help citizens interact better with governments. Although both govtech and civic tech companies ultimately help governments and citizens enhance mutual interaction, the difference is in their target customers – i.e. the payers and users of the products and services. A civic tech company’s primary target customer is citizens. Change.org, for example, is a civic tech company because the company targets citizens directly. In contrast, Accela’s civic engagement services (e.g., legislative management, citizen relationship management) would be classified as govtech because the payers of the services are governments.

Govtech(is(the(technology(that(helps(governments(operate(more(effectively(and(ef5iciently,(and(is(distinct(from(civic(tech(

Chris&ne)Hong)

Govtech( Civic(tech(

!  Technology(that(connects(and(empowers(citizens((

!  Includes(technology(that(enables(citizens(directly(to(better(interact(with(governments;(primary(customers(are(citizens(

!  Technology(helps(governments(operate(more(effectively(and(ef5iciently(

!  Includes(technology(that(helps(governments(to(better(interact(with(citizens;(primary(customers(are(governments(

Focus(of(the(study(

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2. What does the govtech ecosystem look like? This section surveys the players that collectively shape the govtech ecosystem. The key players covered are:

§ Government § For profit companies § Investors § Accelerators and foundations

Government In the United States, government customers are organized into federal, state, local governments and agencies. There are over 600 federal departments and agencies in the United States. Further, there are over 89,000 local government agencies across the country, 50,000 of which are for special purpose government functions like utility and school districtsiii. As of 2015, the United States government spends $175 billion on technology – $79 billion at the federal level and $96 billion at the state and local leveliv.

The$govtech$ecosystem$is$comprised$of$governments,$companies,$investors,$and$accelerators$and$foundations$

Governments*

Footnote:$De:initions$adopted$from$“Govtech$Market$Snapshot”$by$Dustin$Haisler,$Chief$Innovation$Of:icer$at$e.Republic$(www.slideshare.net/dustinhaisler/s2Lgv5).$The$Govtech$Market$Snapshot$report$includes$a$“Civic$Tech”$cluster.$The$cluster$was$not$used$for$this$study,$and$the$existing$classi:ication$of$“civic$tech”$companies$were$categorized$into$the$other$three$clusters.$

Chris&ne)Hong)

For*pro-it*companies*

Investors* Accelerators*&*foundations*

!  Federal$

!  State$

!  Local$$

!  Agencies$

Customers) Service)providers)

Company)scalers) Ecosystem)shapers)!  Traditional$venture$capital$

!  Govtech$focused$ventures$capital$

!  Strategic$investors$

!  Impact$investors$

!  Growth/private$equity$

!  Accelerators$

!  Foundations$

!  Legacy$vendors$

!  Government$contractors$

!  Large$tech$companies$

!  Emerging$government$

focused$tech$companies$

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For profit companies There are four types of for profit companies in the govtech space:

• Traditional legacy vendors like Oracle, IBM or SAP • Government contractors like Accenture, CGI, or Deloitte • Large tech companies like Google parent Alphabet or SalesForce • Government focused tech companies, like Accela or OpenGov

The focus of this paper is the fourth category of for profit companies – emerging tech companies that focus primarily on government verticals. There are over 100 notable for profit companies that have federal, state, local governments and agencies as their primary customers. These emerging companies can be categorized into three main domains: administration, service delivery, and smart infrastructurev. The following categorization and definitions were adopted from E.Republic.

§ Administration: The record layer of government, including permissions, data and money. Services or products help increase transparency, processing, visualization and management of records. Category includes systems that automate financial, personnel, case, asset, traffic, construction and land management records.

§ Service delivery: The transaction layer of the government. Services or

products help processing of transactions, payments and logistics by public employees or citizens/business entities to fulfill public service requests and service delivery. The category would include systems that automate licensing, payments and business intelligence of records. It also includes services that engage with citizens to better deliver government services.

§ Smart infrastructure: The infrastructure layer of government enabling

operational capacity of physical assets ad systems (e.g., facilities, roads, and utilities) through digital controls, sensors, self-‐monitoring predictive analytics and security. The category includes smart grid, smart meter and the cloud.

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Investors There are five types of investors in the govtech space: traditional venture capital, govtech focused venture capital, strategic investors, impact investors, and growth/private equity firms. Traditional venture capital Traditional venture capital firms look for investments that will yield above market returns. They generally have a diversified portfolio with strategic pillars. Thus far, traditional funds have invested in govtech companies opportunistically; most VCs in the database invested in one govtech company. OpenGov, for example, is just one of Andreessen Horowitz’s 284 portfolio companies. Govtech focused venture capital The Govtech Fund, managed by Ron Bouganim and advised by Tim O’Reilly, is the first govtech focused venture capital fund. Founded in September 2014, the fund has raised $23 million in its first round and exclusively invests in govtech companies. Its portfolio companies include companies like SmartProcure, MindMixer, AmigoCloud, Seamlessdocs, and Mark43.

Govtech(companies(are(categorized(into(three(domains(

Administration+!  Companies(that(service(the(record(layer(of(

government(permissions,(data(and(money.(Includes(systems(that(automate(;inancial,(personnel,(asset,(traf;ic,(construction(and(land(management(records(

Domains+

Service+delivery+!  Companies(that(service(the(transaction(layer(of(the(

government.(Services(or(products(help(processing(of(transactions,(payments(and(logistics(by(public(employees(or(citizens/business(entities(to(ful;ill(public(service(requests(and(service(delivery(

Smart+infrastructure+

!  Companies(that(serve(the(infrastructure(layer(that(enables(operational(capacity(of(physical(assets(and(systems((e.g.,(grids,(smart(meter)(

Examples+

Accela(automates(transactions(and(service(delivery(–(e.g.,(land(management,(asset(management,(licensing(

Bidgely(helps(governments(monitor(and(manage(energy(use(

GovDelivery(helps(governments(expand(digital(audiences(and(move(citizens(to(take(action(through(digital(channels(like(email,(text,(and(social(communication((

Footnote:(De;initions(adopted(from(“Govtech(Market(Snapshot”(by(Dustin(Haisler,(Chief(Innovation(Of;icer(at(e.Republic((www.slideshare.net/dustinhaisler/s2Rgv5).(The(Govtech(Market(Snapshot(report(includes(a(“Civic(Tech”(cluster.(The(cluster(was(not(used(for(this(study,(and(the(existing(classi;ication(of(“civic(tech”(companies(were(categorized(into(the(other(three(clusters.(

Christine(Hong(

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Strategic investors There are venture capital funds that invest for strategic purposes as well. For example, In-‐Q-‐Tel is a privately held, not-‐for-‐profit company that invests in high tech companies for the purpose of keeping the Central Intelligence Agencies equipped with the latest technology. It has made three investments in the govtech space: Socrata, Boundless Spatial, and BlueLine Grid. Impact investors Impact investors invest with the goal of creating social impact and not solely to generate above market returns. Impact investors provide blended capital including grants and investments. Omidyar Network, established in 2004 by eBay founder Pierre Omidyar, focuses on a portfolio of companies that promote governance and civic engagement. SeeClickFix, a company that allows residents to report non-‐emergency neighborhood to local governments, is an exemplary investment they have made in the govtech space. Omidyar Network also provides grants to accelerators like Code for America. Growth/private equity investors Growth and private equity investors invest in later stage deals. Accela – one of the most well funded companies in the govtech space – raised $235 million from growth/private equity firms like ABRY Partners, Bregal Sagemount, and J.P. Morgan. Accelerators and foundations Non-‐profit entities and foundations play the role of accelerators in the govtech space through funding, talent development, mentorship and talent match making. Accelerators The most prominent accelerator in the space is Code for America, a non-‐profit founded in 2009 that matches technology professionals with city governments. Code for America has partnered with 130 governments as of 2016, working on projects like opening police data with the Indianapolis Department of public safety. The Code for America Fellowship Program has played an instrumental role in incubating companies. For example, Textizen – a text message platform that helps governments engage with its citizens – was born out of the Code for America

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program. Founder Alex Yule was able to gain a deep understanding of the need for an engagement platform in government agencies while working on the fellowship program. By the end of the fellowship, he was able to identify a clear need in the market and test the minimal viable product. Textizen was quickly advertised through the press and word of mouth, followed by inbound service requests from other government agencies. The company received seed funding from the Knight Foundation, and raised $450,000 before being acquired by GovDelivery in 2015. Similarly, Code for America has been providing seed funding and support to companies like ArchiveSocial, Aunt Bertha, and AmigoCloud. Foundations Foundations like the Knight Foundation, Citi Foundation and Bloomberg Philanthropies play a cardinal role in shaping the govtech ecosystem. The Knight Foundation – focused mainly on civic tech – hosts the City Challenge and provides seed funding for start ups. The Citi Foundation established the City Accelerator to help municipalities run more effectively in 11 cities. Bloomberg Philanthropies launched the Mayor’s Challenge competition that awards bold ideas to promote government innovation.

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3. How is the ecosystem changing? The paper thus far mapped out the key players in the govtech ecosystem. The following section shows how the ecosystem has been shifting by tracking the activities of governments, for profit companies, and investors. Overall, the govtech space has grown significantly in the past five years. The government is making moves to become more tech savvy and is changing its ways of working with technology companies. Notable govtech companies have emerged, while existing companies are scaling organically and inorganically through acquisitions. Large tech players like Google parent Alphabet are moving into the space. Also, there has been a dramatic increase in private capital flow, with prominent venture capital firms investing in govtech companies – especially in earlier stage companies.

Government Federal, state, and local governments are showing indications of becoming more technology savvy. Moreover, local governments are changing their procurement practices for better private sector engagement.

How$is$the$ecosystem$changing?$

Chris&ne)Hong)

Governments*

For*pro-it*companies*

Investors*

Trend* Drivers*

!  Governments$IT$systems$moving$onto$cloud$!  Higher$citizens$expectations,$especially$among$the$

younger$generation$!  Public$system$failures$like$Healthcare.gov$!  Budget$cuts$driving$the$need$for$more$cost$effective$

technology$solutions$$

!  Governments$are$becoming$more$tech$savvy$customers$

!  Governments$are$changing$their$procurement$practices$$

!  Active$incubator$and$acceleration$programs$!  Government$signaling$(e.g.,$more$tech$savvy,$

changing$procurement$systems)$!  More$active$early$stage$funding$

!  Many$notable$small$government$focused$companies$emerging$in$the$past$5$years$

!  Existing$companies$scaling$through$acquisitions$!  Large$tech$companies$moving$into$the$space$(e.g.,$

Alphabet’s$SideWalk$Labs)$

!  Government$signaling$(e.g.,$more$tech$savvy,$changing$procurement$systems)$

!  Increased$exit$opportunities$for$smaller$companies$$

!  Private$capital$Nlow$has$increased$dramatically$!  Increased$early$stage$investing$into$govtech$

companies,$fueling$venture$backed$growth$!  Traditional$venture$capital$Nirms$moving$into$the$

space$(e.g.,$Andreessen$Horowitz)$

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Governments are becoming more tech savvy Federal Government In 2009, President Obama created the position of Chief Technology Officer of the United States – acknowledging the importance of the role of technology in government. In 2014, the White House launched the United States Digital Service to provide the federal government consultation services on information technology. The first head of the US Digital Service was a former Google Engineer. Similarly, 18F was established to reform citizen facing government technology using lean startup methods, open source code, and contemporary programming languages. To ensure a steady flow of tech talent, the White House launched the Presidential Innovation Fellows program to pair top talent from the private and non profit sectors with government officials to solve challenges in the federal government. These key initiatives and hires signal that the federal government is making efforts to become more tech savvy. Local Governments San Francisco and New York are two of the most prominent examples of cities that are leading the charge in innovation. San Francisco Mayor Edwin M. Lee, for example, has launched the Mayor’s Office of Civic Innovation (MOCI) in order to keep the government more “accountable, accessible, and responsive.” He created the Chief Innovation Officer role and hired Jay Nath to “introduce new ideas and approaches to make city government more transparent, efficient, and focused on our customers.vi” Mayor De Blasio of New York established the Tech and Innovation Office to drive the city wide technology strategy. The program is headed by the first ever Chief Technology Officer of New York, Minerva Tantoco. The office is recruiting top tech talent to drive projects that make the city smarter. Governments are changing how they work with the private sector Governments – especially at the city level – are experimenting with new ways of working with the private sector. One of the biggest areas of reform is procurement. Traditional government procurement processes are complex and difficult for the private sector to navigate. A typical process starts with issuing a request for proposal (RFP) and a bidding process, which may be prolonged due to challenges like protests. Vendor selection can take months to several years.

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Emerging govtech companies may find this process difficult to navigate for three reasons. First, companies are required to comply with a variety of regulations to be government contractors, which may be costly and time consuming. As an example, a snapshot of the requirements by the San Francisco city and county is captured below.

Second, the vendor registration process is complex. Within one local government, each department may have a different set of registration documents scattered across multiple websites without any centralized guidelines. Third, a high degree of customization is often preferred than standardized products and services. For such reasons, it takes time for smaller companies set up and generate revenue – making it difficult for them to grow quickly and sustainably. Government entities often times end up contracting larger companies that know how to navigate the procurement system rather than working with the companies that provide the best, most cost effective solutions. Prices are driven up because players are driven out in the bidding process. However, many governments have often times found it challenging to reform their procurement processes. San Francisco is one of the cities leading the charge in changing how cities work with the private sector. For example, modeled after the 18F, the city is widening its pool of pre-‐approved vendors. Once a company is pre-‐approved after submitting a prototype, they are then “handheld” by the government through the vendor registration and compliance processes. The government would then issue RFPs to

Compliance+requirements+for+government+

contractors+–+example+of+San+Francisco+

Source:+City+and+County+of+San+Francisco,+2016+Start+UP+IN+Residence+Program++ Chris&ne)Hong)

Requirement* Explanation*

!  The+Ordinance+requires+contractors+to+provide+employees+covered+by+the+Ordinance+who+do+work+funded+under+the+contract+with+hourly+gross+compensation+and+paid+and+unpaid+time+off+that+meet+

certain+minimum+requirements+

Minimum*Compensation*Ordinance*(MCO)*

!  The+HCAO+requires+employers+to+offer+health+plan+beneMits+to+their+covered+employees,+to+make+payments+to+the+City+for+use+by+the+Department+of+Public+Health,+or,+under+limited+circumstances,+to+

make+payments+directly+to+their+covered+employees.+Covered+employers+must+pay+$4.50+per+hour,+

capped+at+$180.00+per+work+week.++

Health*Care*Accountability*Ordinance*(HCAO)*

!  If+the+contract+is+for+more+than+$50,000,+the+ordinance+requires+contractors+to+notify+the+First+Source+Hiring+Program+of+available+entryTlevel+jobs+and+provide+the+Workforce+10+Development+System+with+

the+Mirst+opportunity+to+refer+qualiMied+individuals+for+employment+

First*Source*Hiring*Program*(FSHP)*

!  Vendors+cannot+discriminate+in+the+provision+of+beneMits+between+employees+with+domestic+partners+and+employees+with+spouses,+and/or+between+the+domestic+partners+and+spouses+of+employees.++

Nondiscrimination*in*Contracts*and*BeneDits*

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the pre-‐approved pool of companies to expedite the procurement process. Such initatives allow the government to effectively purchase cost effective products and solutions in a shorter amount of time. The San Francisco Entrepreneur-‐in-‐Residence program is another example of how goverments can reform the traditional procurement process. The program allows for earlier stage companies to deliver disruptive solutions by working with the government directly. The following slide captures a snapshot of the program.

These changes indicate that governments are becoming more effective buyers. Perhaps as a result of these efforts, there are indications that sales cycles are shortening and velocity is increasing. According to the Govtech Fund, the average sales cycle of the fund’s four portfolio companies is 86 days, but can be as short as 2 weeks.vii One of the portfolio companies has been signing government clients at a rate of one in three days. While interviews with other govtech companies reveal that sales cycles still remain long on average and could take up to years, there are indications of positive change. For profit companies Emerging govtech companies, existing govtech companies scaling through acquisitions, and tech giants are playing a critical role accelerating the govtech industry.

San$Francisco$Entrepreneurship1in1Residence$Program$

Source:$City$and$County$of$San$Francisco,$2016$Start$UP$IN$Residence$Program$$ Chris&ne)Hong)

!  Launched$by$Mayor$Edwin$Lee$in$2014$to$explore$innovative$solutions$to$civic$challenges$that$can$lower$costs,$increase$revenue,$and$enhance$productivity$

$!  The$program$selects$talented$start$ups$and$matches$with$city$departments$for$16$weeks$

$!  Start$ups$develop$technology$enabled$prototypes;$if$successful,$departments$will$license$and$purchase$the$product$

Program'description'

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Government focused technology companies are emerging There has been a marked increase in govtech companies since 2010. As shown in the exhibit below, 60 of the 98 most notable govtech companies in the database emerged after 2010. The surge coincides with and are fueled by the rise of accelerators like Code for America (founded in 2009, funded by Omidyar Network) and government efforts to become more tech savvy. A number of these companies are still small in size, with less than 50 employees.

60#notable#govtech#companies#were#founded#in#the#past#6#years#

0"

2"

4"

6"

8"

10"

12"

14"

16"

18"

Before"2000"

2000" 2001" 2002" 2003" 2006" 2007" 2008" 2009" 2010" 2011" 2012" 2013" 2014" 2015"

Number'of'govtech'companies'found'per'year'

Source:#Deal#Flow#Database,#Govtech.com,#Angel#List,#CB#Insights,#Crunchbase# Chris5ne"Hong"

N=98# N=#60##

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Existing companies are scaling through acquisition The market has seen a dramatic increase in acquisitions from 2014, driven by companies like Accela and GovDelivery. Out of the 23 acquisitions from 2001, more than half of the deals were from 2014 and 2015. Accela alone accounted for 9 of the 23 acquisitions captured in the database, and GovDelivery accounted for 4 deals.

The$majority$of$the$companies$included$in$the$study$are$small,$with$less$than$50$employees$

75#

6#10#

2# 3# 1# 1#

Less#then#50# 51/100# 101/250# 251/500# 501/1000# 1001/5000# Over#5000#

Number'of'employees'per'company'

Source:$Deal$Flow$Database,$Govtech.com,$Angel$List,$CB$Insights,$Crunchbase$ Chris5ne#Hong#

Small:'75' Midsized:'18' Large:'5'

18

There%were%23%acquisitions%from%2001%to%2015;%more%than%half%are%from%2014:15%

The$number$of$acquisitions$spiked$in$2014915$

Source:%Deal%Flow%Database,%%Govtech.com,%Angel%List,%CB%Insights,%Crunchbase% Chris&ne)Hong)

1) 1)

2)

1) 1) 1)

8) 8)

2001) 2009) 2010) 2011) 2012) 2013) 2014) 2015)

Accela$accounted$for$6$of$the$8$acquisitions$in$2014$

Accela&and&GovDelivery&accounted&for&more&than&half&of&the&acquisitions&

Accela&and&GovDelivery&acquired&13&companies&

Source:&Deal&Flow&Database,&Govtech.com,&Angel&List,&CB&Insights,&Crunchbase& Chris&ne)Hong)

9)

4)

3)

2)

1) 1) 1) 1) 1) 1) 1)

Accela) GovDelivery) TriTech)So<ware)Systems)

Granicus) AppCityLife) Fiscal)note) Maximus) mySideWalk) OpenGov) Periscope)Holdings)

Taser)

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Acquisitions are driven by a need for scale, as scale is a competitive advantage in the industry. Scale is an indicator of reliability and sustainability of the business, which is quintessential for government customers. Bigger companies also have more experience in navigating around the complex procurement process, and have the wherewithal to absorb higher customer acquisition costs. Moreover, companies that have grown successfully can attract more funding to further scale. The exhibit below shows how Accela accelerated its growth through acquisitions. It tripled its revenue from 2013 to 2015 after acquiring 8 companies. Accela’s recent activites signal that there may be more consolidation in the industry going foward, and greater exit opportunities for smaller companies.

List%of%acquisitions%by%companies%in%the%database%

Source:%Deal%Flow%Database,%Crunchbase% Chris&ne)Hong)

Acquiror Acquisition+year Acquired+companyAccela 2015 PublicStuffFiscal3note 2015 MyCandidateGovDelivery 2015 TextizenMaximus 2015 AcentiamySideWalk 2015 VoterTideTaser 2015 MediaSolv3Solutions3CorporationTriTech3Software3Systems 2015 TiburonAccela 2015 SpringbookAccela 2014 Decade3Software3CompanyAccela 2014 Government3OutreachAccela 2014 KinsailAccela 2014 EnvistaAccela 2014 IQM2Accela 2014 GeoTMSGovDelivery 2014 NuCivicPeriscope3Holdings 2014 BidSync.comAppCityLife 2013 OnQueue3TechnologiesGovDelivery 2012 GovInteractGranicus 2011 Daystar3Computer3SystemsGranicus 2010 Webcasting.comTriTech3Software3Systems 2010 OrtivusGovDelivery 2009 GovLoopAccela 2001 Tidemark3Computer3Systems

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Accela&accelerated&growth&by&raising&capital&and&through&acquisitions&

Source:&PrivCo,&Crunchbase,&Interview&with&Max&Schnoedl,&CFO& Chris&ne)Hong)

Company(pro*ile( Growth(model(

!  Description:(Accela&software&helps&government&agencies&automate&transactions&and&service&delivery&in&land&management,&asset&management,&licensing&and&public&health&and&safety&

!  Founded:&1999&

!  Employees&(2015):&700&&

!  Financials&(2015):&Revenue&of&$140&million&&

!  Funding:(3&rounds&of&funding&from&undisclosed&venture&capital&(2004)&and&private&equity&(2013,&2015)&

!  Acquisitions:(8&acquisitions&in&2014P15&including&SpringBook,&IQM2,&Envista,&Kinsail,&Government&Outreach,&Decade&Software&Company,&and&Public&Stuff&

!  Growth(through(acquisitions&!  Started&out&with&a&point&solution&in&permitting&&!  IdentiXied&customer&needs&of&existing&clients,&and&expanded&

into&new&products&and&solutions&through&acquisition&&&

!  Scaling(quickly((!  Scale&is&critical&to&government,&as&credibility,&reliability&and&

long&term&sustainability&of&service&providers&are&critical&&!  Scaled&through&targeting&larger&customer&base&(i.e.&cities&with&

population&of&over&100,000)&&

!  Bootstrapping(until(company(reached(scale(!  Received&Xirst&round&of&funding&of&$4.12&million&from&VCs&Xive&

years&after&establishment&!  Only&received&substantial&rounds&of&funding&in&2013&and&2015&

after&proving&sustainability&and&acquiring&“high&proXile”&customers&(e.g.,&City&of&New&York,&San&Francisco)&&

!  Accelerated&growth&after&funding&

Accela&attracted&the&most&private&capital,&totaling&over&$200&million&

!"!!!!

!50!!

!100!!

!150!!

!200!!

!250!!

Accela! SS

T!

OPOW

ER!

C3!Energy!

Socrata!

Captricity!

OpenGov!

Enigm

a!

FiscalNote!

Bidgely!

AutoG

rid!Systems!

TriTech!SoGware!Systems!

EngagePoint!

GovDelivery!

WaterSmart!SoGware!

Mark43!

Granicus!

Boundless!SpaMal!

$&USD&million&

Scale&of&funding&&&number&of&companies&

>$10&million&

>$0&8&$10&

No&funding&or&undisclosed&

18&

46&

34&

Companies&with&more&than&$10&million&of&funding&

Source:&Deal&Flow&Database,&Govtech.com,&Angel&List,&CB&Insights,&Crunchbase& ChrisMne!Hong!

21

Large tech companies are moving into the space Large tech companies like Alphabet (Google parent company) are moving into the govtech space. SideWalk Labs, the brainchild of Larry Page and Daniel Doctoroff, was launched in 2016 to create a “smart city from scratch.” The company’s first major initiative is LinkNYC that replaces old pay phones with kiosks that provide free Wi-‐Fi within a 150-‐foot radius, as well as touchscreens to allow free local phone calls and Internet browsing. Companies like Alphabet have a unique and significant role in creating smarter cities and governments. Alphabet has the capital to firepower innovations. It is able to attract top talent to navigate around complex government processes and influence political processes. It can convene key players to cooperate on initiatives. Going forward, tech giants like Alphabet will have a large role to play in the govtech space.

Accela&reached&3x&growth&after&raising&capital&

Source:&PrivCo& Chris&ne)Hong)

29.34)38.8)

50.5) 55) 59) 64.5) 70)

90)

)140))

Revenue&($&mn)&

Number&of&employees&

146) 165) 210) 220) 230) 240) 260)

500)

700)

2007) 2008) 2009) 2010) 2011) 2012) 2013) 2014) 2015)

CAGR)10.6%)

CAGR)29.5%)

$40&million& &&&&&&&&$143.5&million&&Funding&

Accela&focused&on&scale&and&sustainability&before&accelerating&growth&through&funding&and&acquisitions&in&2013&

22

Investors There have been three notable changes: private capital flow has increased in the past few years, especially in early stage govtech companies. Traditional venture capital firms are also moving into this space. Increased private capital flow In the past, few govtech companies have attracted large amount of private capital, especially in early stages. Venture capital firms express risk factors such as long sales cycle, complex processes, and return profile as a few reasons why they hesitate to invest. There was a spike in private capital flow in 2015. Established companies like Accela accounted for a large portion of the capital flow, but relatively new companies like OpenGov or Enigma were also able to raise capital. Overall, while not gradual, private capital flow increase by 50% compounded annual growth rate (CAGR) from 2004 to 2015.

23

More active early stage investing Many companies in this space bootstrapped until they reached scale. Data shows that the longest living companies have self-‐sustained for an average of 16 years before receiving investment. Maximus, a company founded in 1975 that helps governments administer health, child, and family related programs, did not raise private capital until 2010. Accela and GovDelivery also grew self-‐sustainably for years. They raised capital in later stage rounds after showing promises of longer-‐term sustainability.

24

In recent years, many companies were able to raise capital within 2 years of their foundation. Companies can now attract capital from early on, indicating a new model of venture-‐backed growth in the govtech space. The most prominent example is OpenGov, which raised series A of $3 million the year if was founded. It raised a total of $47 million, enabling the acquisition of Ontodia in April 2016.

Longest(living(businesses(bootstrapped(for(an(average(of(16(years(before(receiving(investment(

35#

22#19#

17#

11# 11#9# 9#

Maximus# TriTech#So6ware#Systems#

Vision#Internet# ViewPoint# Boundless#SpaBal# GovDelivery# Granicus# SST#

Years&from&foundation&to&/irst&investment&among&the&most&established&govtech&companies&

Year&founded& 1975& 1992& 1995& 1995& 2002& 1999& 1999& 1995&

ChrisBne#Hong#

Average:&&16&years&

Footnote:(For(Maximus,(35(years(is(based(on(the(time(between(its(foundation((and(receiving(private(capital.(In(2010.(The(company(went(public(in(1997,(raising(money(from(the(public(market.(

Source:(Deal(Flow(Database,(Govtech.com,(Angel(List,(CB(Insights,(Crunchbase(

There%is%active%late%stage%funding%for%businesses%that%proved%long%term%viability%

!40!!

!113!!

!199!!!230!! !216!!

!34!!!61!!

Seed! Series!A! Series!B! Series!C! Series!D!3!G! Debt/Conver;ble!note! Undisclosed/others!

Amount'of'investments'for'type'of'investment'

$%USD%million,%Total%=%$892%million%

#'of''deals'

Average''Deal'size'($'mn)''

78%

0.57'

25%

4.5'

18%

11'

9%

26'

5%

43'

9%

3.3'

Chris;ne!Hong!Source:%Deal%Flow%Database,%Govtech.com,%Angel%List,%CB%Insights,%Crunchbase%

25

Many%companies%raised%capital%within%2%years%%

N%=%64%

Years&before&receiving&/irst&investment&

Average:&&3&years&

Chris&ne)Hong)Source:%Deal%Flow%Database,%Govtech.com,%Angel%List,%CB%Insights,%Crunchbase%

35%

22%

17%

11%11%9% 9% 8%

5% 5% 5% 4% 3% 3% 3% 3% 3% 3% 2% 2% 2% 2% 2% 2% 2% 2% 2% 2% 2% 2% 2% 2% 1% 1% 1% 1% 1% 1% 1% 1% 1% 1% 1% 1% 1% 1% 1% 1% 1% 0% 0% 0% 0% 0% 0% 0% 0% 0% 0% 0% 0% 0% 0% 0%

Maximus%

TriTech%Software%System

s%ViewPoint%

Boundless%Spatial%

GovDelivery%

Granicus%

SST%

EngagePoint%

Loveland%Technologies%

CitySourced%

Accela%

APPCityLife%

StreetCred%

Village%Defense%

Vendor%Registry%

AmigoCloud%

MetroTech%Net%

Cityzenith%

Measured%Voice%

ProductBio.com

%Revelstone%

LocalData%

SnapSense%

Munetrix%

Aunt%Bertha%

Junar%

CivilMaps%

PublicStuff%

SmartProcure%

Compology%

WaterSm

art%Software%

Bidgely%

LegCyte%

Pondera%

DoubleMap%

Localisto%

Citizinvestor%

Recovers.org%

Open%Counter%Enterprises%

ArchiveSocial%

Loci%Controls%

SeeClickFix%

CityScan%

Placem

eter%

Mark43%

AutoGrid%System

s%Enigm

a%Captricity%

Socrata%

MuniRent%

Rem

ix%

NextRequest%

CitiVox%

OpportunitySpace%

OppSites%

coUrbanize%

Metropia%Inc.%

PredPol%

Seam

lessDocs%

BlueLine%Grid%

FiscalNote%

OpenGov%

C3%Energy%

OPOWER%

Companies*like*OpenGov*are*scaling*through*early*stage*investments*

Chris&ne)Hong)

Bootstrap,)then)go)public))

Bootstrap)until)reaching)scale,)then)accelerate)growth)through)investments)and)acquisitions)

Scale)through)early)stage)investments)

Growth)models)

26

Traditional venture capital firms are moving into the space Traditional venture capital firms like Andreessen Horowitz (A16Z) and New Enterprise Associates are moving into the space. A16Z is a $4 billion venture firm founded in 2009. In 2015, it led two rounds of Series B funding for OpenGov. Marc Andreessen personally joined the board of the company, commenting that “OpenGov is changing the future of government, giving public agencies and all levels the kinds of financial tools that successful companies use to analyze and manage their business. Better data means a better-‐run government – and that’s good for all of us. I’m thrilled to be a part of the mission.viii” New Enterprise Associates (NEA) is a venture capital firm founded in 1977 focusing on a variety of investment stages, ranging from seed to growth stage. With $18 billion assets under management, it is considered one of the largest venture capital firm. Since its founding, the firm has invested in 650 companies in a variety of industries and realized over 500 liquidity events. The company has made four investments in the govtech space, including Placemeter, Opower, Enigma and Fiscal Note since 2010. However, govtech companies account for a small proportion of these funds’ overall portfolio. In fact, most investors in the space have invested in one company. Nevertheless, the entry of traditional venture capital in this space provides credibility and validation that will likely spur further investment.

OpenGov:)Scaling)through)early)stage)investments)

Chris&ne)Hong)

Company(pro*ile( Growth(strategy(

!  Description:(OpenGov)increases)7inancial)transparency)and)budget)intelligence)for)state)and)local)governments))

!  Founded:)2012)

!  Employees)(2015):)~)150)people))

!  Financials)(2015):)Undisclosed))

!  Funding:($47)million)through)4)rounds)of)funding)from)24)investors)from)early)stages)of)the)company,)including)prominent)investors)like)Andreessen)Horowitz)

!  Acquisitions:(Acquired)Ontodia)in)April)2016,)a)open)data)solutions)7irm)

3) 4)

15)

25)

Series)A)2012) Series)A)2013) Series)B)2014) Series)B)2015)

Funding(year(and(amount($)million)

!  Focusing(on(a(point(solution((!  Created)a)product)focusing)on)one)speci7ic)vertical)based)on)

government)need))

!  Raising(capital(early(on(for(rapid(growth(!  Raised)capital)from)inception)to)accelerate)growth,)allowing)

OpenGov)to)reach)more)than)500)governments)in)44)states)!  Quickly)expanded)sales)organization)and)built)expertise)in)

navigating))

Source:)Press)Search,)Crunchbase)

27

Most%investors%invested%in%one%govtech%company%

Number'of'investments'in'govtech'companies'(multiple'rounds'in'one'company'counts'as'one)'

Chris&ne)Hong)

0)

2)

4)

6)

8)

10)

12)

14)

16)

Code

)for)A

merica)

Govtech)Fund

)Laun

chCapital)

Andreessen

)Horow

itz)

Kapo

r)Capita

l)SV

)Angel)

2M)Com

panies)

ABRY

)Partners)

Accomplice)

Alrai)capita

l)Ap

sara)Capita

l)Ba

nd)of)A

ngels)

Bold)Capita

l)Partners)

Brevet)Capita

l)Managem

ent)

Capital)Inn

ovators)

City)Light)Capita

l)Co

llabo

ra&ve)Fund

)Co

nstella&o

n)Techno

logy)Ven

tures)

Correla&

on)Ven

tures)

Dan)Ro

se)

Dorm

)Roo

m)Fun

d)E.ON)Ven

ture)Partners)

Eric)Schmidt)

FirstM

ark)Capital)

Foun

da&o

n)Capital)

Frazier)T

echn

ology)Ve

ntures)

Gene

ral)Catalyst)P

artners)

Goldcrest)Investm

ents)

Green)Visor)C

apita

l)Inform

a&on

)City

)J.P

.)Morgan)Partne

rs)

Joseph

)Hlady)

Khosla)Ven

tures)

Labrador)Ven

tures)

Laun

chpad)LA)

Levensoh

n)Ve

nture)Partne

rs)

Mark)Cu

ban)

Men

lo)Incubator)

Morgenthaler)V

entures)

New

)Groun

d)Ve

ntures)

New

)York)Life)Insurance)Co

mpany)

Ope

nView)Ven

ture)Partners)

Pallasite)Ve

ntures)

Perle

)Ven

tures)

Portage)Ve

nture)Partne

rs)

Qualcom

m)Ven

tures)

RNR)Ve

ntures)

RWE)Supp

ly)&)Trading)

ScoY

)Coo

k)SF)Capita

l)Partners)

Social)Capita

l)Soun

dBoard)Angel)Fun

d)Steve)Case)

The)New

)York)Times)

Thriv

e)Capital)

TriplePo

int)C

apita

l)Va

nedge)Capital)

Visio

nnaire)Ven

tures)

Winklevoss)C

apita

l)

Source:%Deal%Flow%Database,%Govtech.com,%Angel%List,%CB%Insights,%Crunchbase%

Only%a%few%investors%made%more%than%one%investment%

14#

#4## 4# 4#3# 3# 3# 3#

#2## #2## #2## #2## #2## #2## #2## #2## #2## #2##

Code#for#America#

Govtech#Fund#

Knight#Founda:on#

New#Enterprise#Associates#

Civic#A

ccelerator#

InBQBTel#

LaunchCapital#

Motorola#Solu:ons#Venture#

500#Accelerator#

Andreessen#Horow

itz#

Entrepreneurs#Roundtable#

Founder#Collec:ve#

Kapor#Capital#

Sand#Hill#Angels#

StartBup#Chile#

SV#Angel#

TechStars#

Westly#Group#

Top$investors$in$the$govtech$space$by$frequency$of$investment$(multiple$rounds$in$one$company$counts$as$one)$

Chris:ne#Hong#Source:%Deal%Flow%Database,%Govtech.com,%Angel%List,%CB%Insights,%Crunchbase%

Accelerators%

28

4. What factors will accelerate market take-‐off? The govtech ecosystem has grown quickly in the past few years, driven by the changes in government behavior, the growth of govtech companies, and the influx of private capital. These are promising signals that indicate that the industry is heading towards an inflection point. Industry experts point to a three key enabling factors for further growth of the space. Governments need to become better buyers The govtech market will depend ultimately upon governments becoming better customers by reforming procurement processes. With a rise of a more tech savvy generation of citizens, reforms are imperative. The likes of San Francisco are leading the charge, but changes need to be rolled out across the board in multiple levels of government. The following are a few ways experts point to for a better procurement processes:

§ Simplifying the entry requirements of registering as a vendor § Prioritizing standard, best in class, commercially available products over

large custom projects § Building expertise in integrating across products in house vs. building new

products in house § Changing rules so contracting officers can adapt more quickly in how they

buy as long as commitments are 1 year or less § Moving to smaller procurements vs. bundling all problems under one

procurement, which makes only integrators able to bid An important enabler of large scale changes is the inflow of technology and private sector talent into the government as change agents. Notable nonprofit organizations – e.g., Code for America or Fuse Corps – are serving this role as talent match makers. The White House is recruiting talent through the US Digital Service and 18F. The scaling of these programs will enable governments to become better buyers of technology.

29

Big bets by investors with government expertise Bigger bets in the industry by credible investors will further spur growth. Although Marc Andreeseen’s investment in OpenGov built more confidence and interest in the govtech space, there is still uncertainty around govtech in the venture capital community. Only a handful of investors currently understand how to work with the government. A credible investor bringing in capital and making large investments will legitimize, validate, and signal potential in the market. Successful cases of growth and exits The industry needs to see more successful cases of growth and exits for more companies and capital to flow into the space. According to industry experts, a large proportion the acquisition deal sizes still remain under $5 million. Only three out of the companies in the database went public, and it took an average of 24 years to do so. While there is uncertainty in how long it will take to see more successful exits, there are positive signals; new entrants, deal flow and the amount of capital have all increased in the past few years. Companies like Accela and GovDelivery are acquiring smaller companies, increasing exit opportunities. We expect to see a positive trajectory going forward.

30

Conclusion The govtech space has been accelerating growth in the recent years, signaling an inflection point in the near future. Governments are becoming more tech savvy customers and changing procurement practices, especially at the local level. A number of small govtech companies have emerged in the past 6 years, while existing companies are scaling by raising capital and through acquisitions. Larger tech players like Alphabet are moving into the space, bringing in credibility and capital into the market. Prominent investors have started investing in govtech companies, especially in earlier stage ones. However, there is still uncertainty. The acceleration of the market will hinge on three critical factors: further changes in government behavior, big bets by investors, and increased cases of growth and exits. The industry is seeing positive signals and we are optimistic for the role of the govtech industry in innovating how governments operate.

Questions or comments? Contact [email protected]

31

APPENDIX

Tracked((deal(*low(

The$database$is$based$on$private$capital$deal$2lows$of$selected$govtech$companies$

!  Companies$chosen$from$“Govtech$$100”$$list,$and$cross$checked$with$Angel$List$companies$under$“government$innovation”$

!  98$companies$from$the$US$chosen$

Selected(Govtech(company(list(

!  Collected$basic$information$such$as$year$founded,$description,$type,$and$location$

Aggregated(company(pro*iles(

!  Tracked$private$capital$investment$including$seed,$series$AG$G,$convertible$notes,$Mezzanine,$and$debt$$

!  Data$from$CB$Insights$and$Crunchbase$

Chris&ne)Hong)

Footnote:$The$approach$was$adopted$from$Knight$Foundation$report$“The$Emergence$of$Civic$Tech:$Investments$in$a$Growing$Field.”$December$2013$by$Mayur$Patel,$Jon$Sotsky,$Sean$Gourley$and$Daniel$Houghton.$(http://www.knightfoundation.org/media/uploads/publication_pdfs/knightGcivicGtech.pdf)$

Parameters(of(the(database(

Chris&ne)Hong)

Organization*!  The(list(of(top(govtech(companies(were(derived(from(Govtech.com’s(top(100(Govtech(companies(

list,(and(cross(checked(with(Angel(List.(A(few(companies(were(excluded(because(they(were(classiCied(as(“civic(tech”(according(to(the(study’s(deCinition.((

!  The(database(includes(98(proCit(companies(of(varying(sizes,(including(companies(that(went(public(and(were(acquired.(Non(proCit(organizations(and(not(legally(registers(entities(are(excluded.((Companies(identiCied(as(“civic(tech”(were(excluded((e.g.,(Change.org).((

Timeframe*!  Deal(Clow(was(tracked(from(2004(until(April(2016.(Deal(Clows(tracked(by(CB(Insights(and(

Crunchbase(are(included(in(the(database.((

Investments*!  Investors(include(angel(investors,(venture(capital(Cirms,(foundations,(accelerators,(private(and(

growth(equity(Cirms.(Capital(Clows(from(going(public(or(government(funding(were(excluded.((

Geography*!  This(study(is(solely(focused(on(the(United(States(companies(and(deal(Clows(received(domestically(

and(internationally(by(the(companies.((

32

“Smart'infrastructure”'companies'are'relatively'well'funded'

Types&of&companies&surveyed& Amount&of&funding&per&type&of&company&Total'='$892'million'

'487''

'119''

'286''

47'

35'

16'

Administration'

Service'Delivery'

Smart'Infrastructure' 16%&

36%&

N'='98'

48%&

32%&

13%&

55%&

Chris&ne)Hong)Source:'Deal'Flow'Database,'Govtech.com,'Angel'List,'CB'Insights,'Crunchbase'

Govtech(companies(had(an(average(of(2(rounds(of(funding,(with(SST(leading(the(way(

0"

1"

2"

3"

4"

5"

6"

7"

8"

9"

SST"

Captricity

"WaterSm

art"S

o:ware"

Accela"

C3"Ene

rgy"

Compo

logy"

FiscalNote"

Loci"Con

trols"

Ope

nGov"

Seam

lessDo

cs"

SmartProcure"

ArchiveSocial"

Bidgely"

Blue

Line

"Grid

"Bo

undless"S

paNa

l"CityScan"

CivilM

aps"

coUrbanize

"Mark43"

Metropia"Inc."

Ope

n"Co

unter"E

nterprise

s"OPO

WER

"Placem

eter"

PublicStuff

"SeeC

lickFix"

Socrata"

AmigoC

loud

"AP

PCity

Life"

Aunt"Bertha"

AutoGrid"Systems"

Enigma"

Granicus"

Opp

ortunitySpace"

Pred

Pol"

Recovers.org"

Village"Defen

se"

Buildingeye"

CiNV

ox"

CiNzinvestor"

CitySourced"

Cityzenith"

Doub

leMap"

EngagePo

int"

GovD

elivery"

Junar"

LegCyte"

LocalData"

Localisto"

Loveland

"Techn

ologies"

Maxim

us"

Measured"Vo

ice"

MetroTech"Net"

Mun

etrix"

Mun

iRen

t"Opp

Sites"

Pond

era"

Prod

uctBio.com

"Re

mix"

Revelston

e"SnapSense"

StreetCred

"TriTech"So:w

are"System

s"Ve

ndor"Registry"

View

Point"

Number'of'funding'rounds'among'the'64'companies'that'received'funding'

!  Total'143'rounds'!  Average'of'2'rounds'per'

company'

!  Founded(in(1995,(SST(provides(gunshot(detection(systems(to(cities(

!  Series(A(–(G,(with(Airst(round(in(2004(!  Investors(include(City(Light(Capital,(Claremont(Creek(Ventures,(

Labrador(Ventures,(etc(

ChrisNne"Hong"Source:(Deal(Flow(Database,(Govtech.com,(Angel(List,(CB(Insights,(Crunchbase(

33

Companies included in the Deal Flow database

Company Type Description

2FA Administration 2FA Inc. is a veteran-‐owned cybersecurity company created on the single vision of simplifying authentication.

Accela Administration Accela software helps government agencies automate transactions and service delivery in land management, asset management, licensing, and public health & safety.

Aecosoft Service Delivery Aecosoft software helps governments minimize manual workflows and go paperless.

AmigoCloud Administration AmigoCloud provides mobile Geographic Information System (GIS) solutions to government.

Appallicious Administration Appallicious creates open data visualization products for government agencies on its proprietary platform.

APPCityLife Administration AppCityLife provides an end-‐to-‐end platform for developing city-‐ and agency-‐ specific mobile apps.

ArchiveSocial Administration ArchiveSocial provides cloud-‐based social media archiving for records management, regulatory compliance, and e-‐discovery.

Aunt Bertha Service Delivery

Aunt Bertha helps people find social services and education programs in their neighborhood by ZIP code.

AutoGrid Systems

Smart Infrastructure

AutoGrid Systems analyze the large amounts of data generated by smart meters, building management systems, voltage regulators, thermostats and other equipment, allowing public utilities to monitor usage and automate controls.

Bidgely Smart Infrastructure Bidgely helps governments monitor and manage energy use.

BlueLine Grid Administration BlueLine Grid helps first responders find each other and collaborate in the field.

Boundless Spatial Administration

Boundless provides commercial open source maintenance, spatial IT infrastructure, and data management and analysis tools.

BS&A Software Administration

BS&A Software provides municipalities with a suite of management tools in public finance, property tax and assessment, and building inspection.

Buildingeye Service Delivery

Buildingeye maps planning application data in cities, allowing planners, businesses and the public to see what is being planned in their area.

C3 Energy Smart Infrastructure C3Energy makes software to manage power generation and delivery.

Captricity Administration Captricity converts paper-‐based records to digital data.

CitiVox Administration

CitiVox, Inc. operates an open-‐source platform that enables decision-‐makers visualize data around issues like traffic, crime, public health, environment, and real estate development to drive better policies for government.

Citizinvestor Administration Citizinvestor is a crowdfunding and civic engagement platform for local government projects.

CityScan Smart Infrastructure

CityScan helps inspect, observe and predict street-‐level activity and changes that impact cities.

CitySourced Service Delivery

CitySourced helps cities and utilities manage their assets, ensure regulatory compliance, improve safety, and respond to customer requests.

Cityzenith Service Delivery

Cityzenith allows cities to see, manage, and use the disparate data it holds through its platform.

34

CivicPlus Service Delivery

CivicPlus provides governments with cloud-‐based solutions including websites, HRMS, emergency notifications and mobile apps.

CivilMaps Administration CivilMaps brings artificial intelligence to collecting and analyzing spatial data held by cities.

Compology Smart Infrastructure

Compology builds WasteOS, a dynamic routing system built around the unique needs of the waste industry.

Connected Bits Administration ConnectedBits develops mobile applications to connect governments and other organizations with their communities.

coUrbanize Service Delivery

coUrbanize is an online platform for real estate developers and communities to build better cities together.

Court Innovations

Service Delivery

Court Innovations’ Matterhorn platform enables self-‐service for resolving disputes and minor criminal cases entirely online.

CrimeStar Administration CrimeStar provides investigation and records management software for law enforcement and the courts.

Datamade Service Delivery

DataMade helps people track and understand what is happening in their community through data visualization and storytelling tools.

Department of Better Technology

Service Delivery

The Department of Better Technology is a forms software platform to foster greater engagement and operational efficiency.

DoubleMap Smart Infrastructure

DoubleMap provides an automatic vehicle location platform to university and public transit systems.

Dropcountr Smart Infrastructure

DropCountr is an app-‐based technology for utilities and their customers to help conserve water.

eGov Strategies

Service Delivery

eGov Strategies provides governments with enterprise payment services, content management and additional interactive service delivery tools.

EngagePoint Administration EngagePoint provides multi-‐program enrollment and case management, along with enterprise invoicing and payment processing for government.

Enigma Administration Enigma software allows governments to discover, surface, manage, and analyze public data sources.

ESRI Administration Esri provides a geospatial platform and related tools for public agencies.

EvoGov Service Delivery

EvoGov provides CMS, e-‐government software and custom Web development to municipalities.

FireStop Administration FireStop helps firefighters share critical response information in real time through its mobile software platform.

FiscalNote Administration FiscalNote applies artificial intelligence, big data, and predictive analytics to help public agencies in decision-‐making.

GovDelivery Service Delivery

GovDelivery offers solutions that promote transformation of the citizen experience by helping government reach more people and get people to take action through digital channels.

GovInvest Administration GovInvest helps governments visualize and understand complex actuarial data.

GovQA Service Delivery

WebQA provides multi-‐channel customer service workflow, portal and social-‐networking technologies to governments.

GovSense Administration GovSense is cloud-‐based permitting, licensing and financial software for state and local government.

Granicus Service Delivery

Granicus is a cloud-‐based platform for government transparency, process improvement, legislative efficiency, and citizen engagement.

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iWorQ Administration iWorQ Systems provides municipal management software.

Junar Administration Junar is a cloud-‐based open data platform used by public agencies to use and share the public data they hold.

LegCyte Administration LegCyte leverages technology to make legislation easier to understand.

LocalData Administration LocalData software helps municipalities collect and analyze information about their urban infrastructure.

Localisto Administration Localisto’s civic engagement mobile app allows government to crowdsource data about civic projects.

Loci Controls Smart Infrastructure Loci Controls helps municipalities extract energy from trash in their landfills.

Loveland Technologies Administration

Loveland is a collaborative platform for gathering, using, and presenting information about properties.

Mark43 Administration Mark43 software allows police to collect, manage, analyze and share information.

Maximus Service Delivery

MAXIMUS software and services help governments administer health, child, family, and community development programs.

Measured Voice Administration Measured Voice is a social media management tool for government.

Metropia Inc. Smart Infrastructure

Metropia manages individual and community incentives to change commuter behavior.

MetroTech Net Smart Infrastructure

MetroTech helps municipalities use data from video cameras and sensors to manage traffic.

MeWe Administration MeWe provides workflow software for government inspectors.

Munetrix Administration Munetrix is a web-‐based suite of financial transparency reporting, management, and forecasting tools designed for government, schools, and their citizens.

Municibid Service Delivery

Municibid provides a platform for public agencies to sell surplus and forfeited property.

MuniLogic Administration MuniLogic provides property management and administration software.

MuniRent Service Delivery

MuniRent helps local governments rent underutilized equipment to and from each other.

MySidewalk Administration mySidewalk’s platform allows cities to use aggregated demographic and socioeconomic data in planning and operations.

NextRequest Service Delivery

PostCode is best known for Next Request, a service for managing public records requests.

NIC Service Delivery

NIC (NASDAQ: EGOV) develops and operates official government websites, mobile apps, and secure payment processing for government clients.

Open Counter Enterprises

Service Delivery OpenCounter helps new businesses obtain their permits from City Hall.

OpenGov Service Delivery

OpenGov software allows interested parties to access, explore, and share finance and budget information held by government.

OPOWER Smart Infrastructure

Opower (NYSE: OPOWR) is a cloud-‐based technology for utilities and their customers to help conserve energy.

OpportunitySpace

Service Delivery

OpportunitySpace provides an online marketplace for under-‐valued and abandoned urban real estate.

OppSites Administration OppSitess' platforms bring together cities and investors on underexposed development opportunities

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Periscope Holdings

Service Delivery Periscope provides procurement services to government.

Placemeter Smart Infrastructure Placemeter helps cities measure movement of people and vehicles.

Pondera Administration Pondera helps public agencies use analytics to identify and remediate fraud, waste, and abuse in large government programs

PredPol Administration PredPol identifies the highest risk times and places of criminal activity in near real-‐time.

ProductBio.com

Service Delivery

ProductBio informs the procurement process, including how products comport with city preferences related to environmental, social, fiscal compliance criteria.

PublicStuff Service Delivery

PublicStuff is an online community service that allows individuals to notify the right local departments to get things fixed.

Recovers.org Administration Recovers provides a website for community-‐by-‐community disaster relief.

Remix Smart Infrastructure

Remix allows city transit planners to see the cost and demographic and fiscal impact of proposed route changes.

Revelstone Administration Revelstone data analytics and reporting platform scaled for small and medium sized jurisdictions.

Seabourne Service Delivery

Seabourne provides data integration, consolidation, and visualization tools for public sector.

SeamlessDocs Service Delivery

SeamlessDocs converts PDFs and paper forms into fillable, e-‐signable, secure online digital forms.

SeeClickFix Service Delivery

SeeClickFix allows residents to report non-‐emergency neighborhood issues through its web tool, which are then communicated to local governments.

SmartProcure Service Delivery SmartProcure aggregates the purchase histories of public agencies.

SnapSense Administration SnapSense provides dashboards to track data about what communities want.

Socrata Administration Socrata provides data discovery services for government.

SpotCrime Service Delivery

SpotCrime makes public crime data available through a public-‐facing crime map and alerting service.

SST Smart Infrastructure

SST provides gunshot detection systems to cities across the country to help law enforcement triangulate gun-‐related crimes as they happen.

StreetCred Administration StreetCred is a software-‐as-‐a-‐service offering created by police officers who understand how police officers use information, data and leads.

Taser Service Delivery

TASER provides Electronic Control Devices (ECDs) to law enforcement and corrections.

TransparaGov Administration TransparaGov provides analytical, management, and outcomes measurement software to governments.

TriTech Software Systems Administration TriTech provides computer assisted dispatch, records management, and EMS billing.

Urban Engines Smart Infrastructure

Urban Engines helps cities understand how residents are using transit services, and how those systems are performing.

Vendor Registry Administration

Vendor Registry provides an online registration and bid notification system that solves the pain of both governments and vendors in the $500Bn procurement market.

ViewPoint Administration ViewPoint provides online permitting, licensing, inspections, and code enforcement for local governments.

Village Defense

Service Delivery

Village Defense, Inc. develops a real-‐time mass notification system that alerts residents in a neighborhood when a crime or suspicious activity happens.

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Vision Internet Service Delivery Vision Internet builds custom websites for city and county governments.

WaterSmart Software

Smart Infrastructure

WaterSmart Software uses mobile and online technology to help utilities and their customers monitor use and conserve water.

WiredBlue LLC

Service Delivery

WiredBlue helps police departments connect with their communities and let residents communicate with them securely.

Xcential Legislative Technologies Administration

Xcential’s software replaces paper-‐based rulemaking processes in legislatures and regulatory agencies of government.

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References i Ron Bouganim, “Software is Eating Government: the 86-‐Day Sales Cycle.” LinkedIn Slideshare. http://www.slideshare.net/dustinhaisler/s2-‐gv5 ii Dustin Haisler, “Defining the Govtech Market” E. Republic. April 2015. http://labs.erepublic.com/govtech-‐market-‐2/ iii Ibid. iv Ibid. v Ibid. vi Solutions 4 Cities.com, “Chief Innovation Officer or Chief Curator? You’re your City Need One?” http://www.solutions4cities.com/chief-‐innovation-‐or-‐chief-‐curator/#.V0XTD-‐eDGko vii Ron Bouganim, “Govtech: the $400 Billion market hiding in plain sight.” Govtechfund.com, Jan 2016. http://govtechfund.com/2016/01/govtech-‐the-‐400-‐billion-‐market-‐hiding-‐in-‐plain-‐sight/ viiiviiiviii OpenGov, “Marc Andreessen Joins OpenGov Board of Directors,” OpenGov Blog, October 2015 (http://opengov.com/blog/marc-‐andreessen-‐joins-‐opengov-‐board-‐of-‐directors/)

Govtech: is the Industry at an Inflection Point?

Technology

Transcript of Govtech: is the Industry at an Inflection Point?