The startup was founded in 2017 but already has more than 200 governments across the globe participating, including New York City, London and Los Angeles. Now it's pulling in investment money.
Marketplace.city, a technology procurement startup focused on local government, has raised $1 million from investors.
The company, which officially launched in 2017, has grown relatively quickly: More than 200 governments have signed up to the marketplace, which is free. The list includes giants such as New York City and London, as well as smaller jurisdictions such as Rochester, Mich., and Adams County, Ill.
The investment round was led by Network Ventures and Principio Capital.
The company doesn’t seek to replace procurement systems, exactly, but rather to bring data, context and transparency to the process. That includes sharing pricing amounts between participating governments. Instead of charging governments, the company makes its money by charging a 7 percent fee to winning vendors.
“There are certain purchases that every city, town, and county around the world need to make, so when a platform like Marketplace.city can bring fragmented data into one location you can have a massive impact across a broad set of customers that are using the same initial data set,” said Jeff Maters, founder and managing director of Network Ventures, in a press release. “As they make purchases, that new data feeds back into the system to better inform customers downstream. Eventually the data can be prescriptive to help local governments identify gaps and where they should be investing their budget.”
The company has received particular attention for its work with the city of Aurora, Ill., nearby its Chicago headquarters. It signed a memorandum of understanding with that city in 2019 to handle its IT procurement. In the statement, Aurora CIO Michael Pegues said the city has successfully used Marketplace.city to purchase technology for Next-Generation 911, cybersecurity and more. It’s currently finalizing a body-worn camera purchase as well.
“Previously our projects would take many months if not years to complete, now we are seeing projects complete on average in 100 days, and we are finding better pricing than ever before,” Pegues said.
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