OpenGov raises $15 million – Software prepares to eat Uncle Sam

By Dan Raile , written on May 16, 2014

From The News Desk

Yesterday, Mountain View startup OpenGov announced it had closed their Series B round of financing at $15 million. The round was led by Andreessen Horowitz with participation from Thrive Capital and Formation 8. The investment marks the first for Andreesen Horowitz in the civic technology field, and represents the maturing of the civic innovation market.

The investment world has been slow to back the proliferating sector, similar to hesitation around other markets rich in red tape like healthcare and education. Indeed, government has historically been viewed as a major impediment to the success of internet industry, rather than as a business opportunity.

But there is growing momentum in the civic tech field, with an increasing number of governments coming on board, more entrepreneurial interest in tapping government data sets, and now one of the Valley’s blue chip venture capital firms bestowing support and prestige.

It’s not the biggest civic tech funding round to date. Last fall Accela, which provides cloud enterprise software for governments, raised $40 million. But the OpenGov round is significant because of Andreesen Horowitz involvement and because its products are not only for internal government use but are entirely citizen facing as well.

OpenGov currently has 95 clients that range from small towns to major U.S. cities, as well as state agencies. It is focused entirely on financial information, and its current products present a government’s financial data in a sleek interface with a variety of filters to break the data down. It incorporates historical data as well as current, allowing users to track the differentials between budgeted and actual data for the current year. Here is all of Los Angeles’ financial data going back to fiscal year 2009/2010, for example.

“All the key stakeholders benefit from what we do with this data, visualizing it and making it available online: financial officers, department heads, elected officials and journalists,” says CEO Zac Bookman.

OpenGov CTO Mike Rosengarten offered Pando some insight on where the company goes from here.

“Reporting is just the first stepping stone for our bigger vision which is providing governments with instant and meaningful access to their data, and helping them understand that data so they can govern better,” Rosengarten said.

He added that the next enhancements OpenGov plans to roll out involve self-service and data analytics. The self-service piece would allow a government to get its data incorporated with OpenGov in a matter of hours or days without needing massive internal IT builds. Currently the sales and implementation cycle for governments takes months if not longer.

Abhi Nemani, formerly co-executive director of Code for America, has cited government rules around procurement as a major logjam for the spread of civic technology. OpenGov’s self-service offerings could make this process more seamless and digestible for government officials, giving the startup another leg up on traditional contractors.

The data analytics piece would allow a local government to look to its neighbors or comparable cities across the country and compare their success or struggles on a line-by-line basis. Further, it would incorporate alerts that could be set to notify officials of significant events.

This all sounds pretty simple and straightforward, and the interface is incredibly user friendly. But the reason this field is still wide open, twenty years into the age of the commercial internet, is not a simple matter of the unsexiness of government financial information or the snaggled procurement process of local governments. It has a lot to do with the technical difficulty of the task.

OpenGov’s sleek, interactive graphs demonstrate that it’s already capable of receiving the general ledger of a city, county or agency and transforming all that data into a series of interrelated charts and graphs at users’ fingertips. And this capability is likely to increase as a result of yesterday’s announcement. Rosengarten says he has received over 30 resumes from engineers at top Silicon Valley firms in the last 24 hours.

The civic innovation trend is beginning to attract top talent and investment, and OpenGov is leading the charge. It’s a positive sign for taxpayers who want to know how their money is spent, and for government workers who want to access data in an instant. Marc Andreessen has famously said that “software is eating the world,” and soon, with his help, it may eat the Leviathan.