Both companies work on digitization for local government, especially in the field of back-end automation, an area that has been underserved by gov-tech startups.
CityBase is acquiring the Department of Better Technology (DOBT), bringing together two companies focused on helping governments provide digital services to citizens and automating back-office processes.
The pair of companies share a number of similarities — both have worked on digitizing forms, both have executives that held jobs in finance and both believe that newer government technology companies are still struggling to fit the “guts” of government work into the cloud.
“There’s not a proven model in this generation of gov-tech companies yet that has figured out how to marry truly modern SaaS applications with problems that I consider in the guts of gov tech — so work flows, payments, all of these things are still transitioning,” said Josh Goldstein, CEO of DOBT. “And it was rare for me to encounter a CEO that was thinking about innovating in that space.”
Both companies are also on the Gov Tech 100 list this year.
Where the two companies diverge is in focus. DOBT’s flagship product, Screendoor, is all about digitizing forms and re-shaping the back-end processes a government might use to process those forms. CityBase handles a broader set of concerns, running from content discovery all the way to handling citizen payments.
“We often group at the macro level into payment, digital service, content and communications,” said Mike Duffy, CityBase’s CEO. “And the DOBT platform is [for us] just a gigantic leap forward on the service layer.”
The pair also have a fairly different customer base. DOBT’s leadership includes multiple former members of the White House’s Presidential Innovation Fellows program who served under President Obama, and so they had access to federal agency clients early in their trajectory. CityBase’s work is much more closely tied to local governments.
DOBT has about 60 clients, including some non-governmental groups, while CityBase has somewhere north of 50 customers on board. That includes cities, municipal agencies and utilities.
“DOBT brings a broad set of clients that are new to CityBase,” Duffy said.
The companies will be integrating their products in the days ahead, and Goldstein will take on the role of vice president of products at CityBase.
“[We’re] in an extremely powerful position to understand the underlying structure of multiple services and take them from being siloed, which it seems like they have been since eternity, into a more connected and networked service offering,” Goldstein said. “That’s the thing as VP of products that I’m most excited about digging into.”
That emphasis on the lifecycle of a process is key to where both companies see themselves within the gov-tech ecosystem. Duffy believes that many companies serving governments today will simply digitize a form when asked to do so, without considering everything else the government does with that form: how citizens find it, what the government does with it once it’s submitted, how citizens submit payment along with a form. The result, he said, is employees simply printing out digitized forms and completing their work as they always have.
Similarly, he said, many governments will seek to put a payment online but won’t necessarily put anything else associated with those payments. So the digitization, and any benefit that might come with it, is minimized.
“Until you digitize the process that sits before the payment, you can’t entirely move that service online,” he said.
The companies didn’t disclose the terms of the deal, but did specify that it doesn’t represent an exit for DOBT’s previous investors, 500 Startups and the Knight Foundation. Both will retain their equity in the new company.