Landmark Investment Shows GovTech Market Heating Up

$143.5 million in financing for California-based Accela will help firm expand its cloud platform.

by / February 26, 2015
The Accela Inspector App for Government displayed on Microsoft Windows 8 and Surface Tablet. Accela

Accela, a California-based govtech firm, has received one of the largest ever single investments in a government-related technology startup.

The company, which provides cloud-based civic engagement solutions for government agencies,  announced Feb. 26 that it had closed $143.5 million in new financing. The latest round of investment brings the total capital raised by the company to $200 million over the past 15 months, according to the firm. The cash infusion brings the company’s valuation to $400 million, and indicates growing investor interest in the govtech sector.

“We’re in the very early innings of what we think is going to be an exciting game played out over who will be the leaders in cloud technology for government,” said Accela CEO Maury Blackman. “And this investment really puts us in basically a prime seat to be a very big winner in the vertical space that we serve.”

Accela says the money will be used to make strategic acquisitions, enhance user experience, and develop new capabilities for its Civic Platform, a cloud-based environment that hosts applications developed by the company and its customers. Accela has about 1,000 government clients using its solutions for CRM, environmental health and safety, and land and asset management.

Accela’s latest funding -- led by ABRY Partners, Landmark Partners, J.P. Morgan Private Equity Limited and Karlani Capital -- confirms analyst accounts of an investment growth trend in government technology. Startup OpenGov received a $15 million investment from venture capital firm Andreessen Horowitz in mid-2014. A first-of-its-kind $23 million Govtech fund launched in fall 2014 to support the growth of government-focused entrepreneurial endeavors. And in December, open data platform provider Socrata raised $30 million from Sapphire Ventures to bring the company’s investment total to $55 million.

“There’s been a tremendous amount of capital that’s gone into this space over the past 18 months. And I think what it’s showing is there’s some really big market opportunity here that’s exciting,” Blackman said. “Government will change because we’re going to offer up some innovation solutions to some of the age-old problems that they have.”

Blackman said the funding will allow Accela to further expand its offerings for government agencies.

“We want to be the platform for government," said Blackman. "And I think we have an outstanding shot of making that happen.”

Sacramento Mayor Kevin Johnson said the investment indicates a new era in government in which innovative services make life easier for citizens.

“This era gives us opportunities to not only create more jobs and deliver better services, but also meet our citizens' rising expectations of a more accessible and transparent government through online services and open data,” Johnson said in a prepared statement. “Given the incredible amount of government data our city collects, and our proximity to California's state government operations, Sacramento has a unique opportunity to produce the next generation of government innovations. Government focused technology companies like Accela are helping us seize that opportunity and lead a path into this new era."

Colin Wood former staff writer

Colin wrote for Government Technology from 2010 through most of 2016.