OpenGov: Answering the 3.25 Trillion Dollar Question
Today, I’m delighted to announce that OpenGov has raised a $51 Million Series D round of financing led by experienced GovTech investors Weatherford Capital and 8VC, with participation from existing investor Andreessen Horowitz. This new investment may be one of the largest venture rounds in GovTech history, and it brings our total money raised to $140 Million. It validates OpenGov’s position as the leader in enterprise cloud solutions for government, led by our budgeting, performance, communications, and reporting technology. It also fuels our ability to build, sell, and deploy state-of-the-art, mission-critical cloud solutions in key new product areas.
Seven years ago, we (Joe Lonsdale, Dakin Sloss, Nate Levine, and I) started OpenGov because we saw massive government technology failures in which legacy vendors took advantage of complicated government enterprises. We saw vendors in the space that had a majority of their customers dissatisfied and a number of their customers even filing lawsuits over failed deployments. Many government executives could not access their own data, and staff members spent enormous amounts of time mired in back-office workflows. Seeing a gulf between how these organizations were running and how they could be running, we figured that whitespace held the promise of a company that could make a tremendous positive impact.
We decided to make it our mission to power more effective and accountable government by creating and delivering the technology that our public servants deserve, and that our nation’s communities and taxpayers expect. Along the way, we’ve seen firsthand how U.S. State and Local Governments spend $3.25 Trillion annually. Over 90,000 governments and public agencies and their 19 million employees spend this public money in the supply of critical goods and services to over 330 million U.S. residents. Nevertheless, according to Pew Research Center, public trust is near an all-time low—only 17% of Americans today say they “trust the government.” Most of us don’t know how these agencies work and we often take for granted the critical goods and services that they supply.
There are many reasons for this state of affairs, including political dynamics, bureaucracy, institutional incentives, and even scandal, but there was also a common thread—we saw agency after agency saddled with outdated technology. The birth of enterprise Software-as-a-Service, based on multi-tenant, cloud-first software that provides a lower total cost of ownership and a higher pace of customer-focused development, began nearly two decades ago. Since then, many “SaaS” companies have grown into category leaders and gone ‘public’ in IPOs. Yet, virtually all of these companies have focused on private sector enterprises. The public sector, particularly at the state and local government level, is just now seeing rapid adoption. The primary reason for this is that the “horizontal” software platforms that might serve a range of sectors (like banks, insurance companies, retailers, and pharma), don’t speak to the highly specific workflows of cities, counties, special districts, and state agencies. The industry has been waiting for a truly verticalized SaaS platform with solutions designed for the unique elements of government operations: multi-fund accounting standards, internal/external reporting requirements, collaborative budgeting, and stakeholder engagement to name a few.
The importance of the public sector’s mission to ensure societal safety, health, transportation, and economic vitality deserves great technology to match. In the world we intend to promote, public servants leverage trusted, modern solutions to execute their jobs collaboratively and effectively. Government administrators will be liberated from legacy on-premise technology, information silos, antiquated databases, and complicated spreadsheets with endless tabs and broken formulas.
We’ve come a long way since our first product, which we called Transparency. That point solution garnered our first hundred customers and leveraged the “cloud” to solve a growing pain point for governments. The product set blossomed from there to internal reporting, “open data,” performance measurement, and then a full-fledged end-to-end Performance Budgeting suite used by some of the largest and most important governments like Suffolk County, NY, and the City of Minneapolis, MN. In fact, OpenGov’s Budgeting solution is growing at over 100%, which is nearly unheard of in this otherwise slow-moving industry.
Meanwhile, our “Transparency” business has grown to include a complete line of communications and reporting tools, including surveys and feedback, reporting, Open Data, and story-telling. Entire states are leveraging the capabilities to establish a single source of truth, as is the case for the State of Idaho with its “Transparent Idaho” initiative. We also power the Oklahoma Checkbook and the State of West Virginia.
Overall, governments leveraging OpenGov cut the time it takes to complete the massive budget development process by up to 50%, reduce operational reporting time by 80%, and reallocate up to 1% of their budgets to more strategic initiatives. One small county, Mono County, CA, reallocated a full $2 Million of its $80 Million budget to more strategic uses after using our Workforce Planning software.
OpenGov value propositions for over 1,000 governments:
- End-to-end budget development, workforce planning, and labor forecasting
- Performance metrics tracked and managed across the entire enterprise, all tied to spend
- Internal outcome and operational reporting with a central data hub, interdepartmental collaboration, and sharing
- Financial transparency, stakeholder engagement, story-telling, surveys, and citizen feedback
Our promise and future
Since the beginning, OpenGov has been a values-based and purpose-driven company. In a space where most companies offer on-premise software that is disconnected architecturally and covered in a veneer of product marketing, we want to differentiate ourselves based on our customer-first, cloud-first, mission-driven, and values-based commitments.
We believe history will favor this approach. Eighty years ago, a vendor had to be so good as to be “good enough for government.” Over the last two generations, that phrase became a pejorative. We hope to lead a movement and resurrect the highest standards both for ourselves and our software, and the communities and public agencies we are fortunate enough to work with. In the process, we expect OpenGov to stand not only for cutting-edge innovation, but also to become the safe and trusted choice for government.
None of our early success or future promise would be possible without our incredibly talented and hardworking team. It’s a fun-loving and smart collection of experts, finance leaders, world-class developers and architects, and professional service specialists from across the technology industry. We’re lucky to be backed not just by Will Weatherford, former Speaker of the House of the State of Florida, and Joe Lonsdale, my co-founder and active chairman of the board, but also by a supportive and outstanding group of existing investors including Teamworthy Ventures, Cota Capital, ACME Capital, Sway Ventures, Telstra Ventures, and Glynn Capital. Our board of directors and advisors are the best a team could ask for. And we’ve received tremendous support and advice from partners like Shea & Company and Vista Credit, both of whom know the “GovTech” space inside and out.
We have major initiatives in the works to dramatically expand our product line and our reach and impact. I can’t wait to share more in the coming months and to turn up the dial on our mission to power more effective and accountable government. Our nation’s public servants and the residents they serve deserve nothing less.
Category: OpenGov Updates