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Accela Takes on Second Private Equity Investor Amid Growth

The gov tech company has announced a strategic investment from Francisco Partners, which manages some $45 billion. Accela sells software for such jobs as code enforcement and disaster management.

Accela, which sells software for permitting, licensing, code enforcement and various other tasks, has taken on a “strategic growth investment” from Francisco Partners, the latest example of private equity activity in government technology.

Accela did not disclose the amount of the investment.

In a statement, the company said that Berkshire Partners remains “a significant investor with an equal equity holding.” The Boston-based private equity firm bought Accela in 2017 in what was then described as perhaps the largest gov tech deal of all time.

The two private equity firms will be joint shareholders in Accela, with an equal ownership in the business, Andrew Kowal, partner at Francisco, told Government Technology. Co-investors include members of the Accela management team, he said.

“Accela is very much a leader in the licensing space,” Kowal said, adding that the company offers a “very feature-rich” product and “great” cloud platform.

Francisco Partners manages about $45 billion of capital in “all corners of the tech ecosystem,” he said, and he pointed to the firm’s acquisition of security services provider Forcepoint as an example of Francisco’s experience in gov tech.

“It’s a market we are very familiar with,” he said.

Both Kowal and EJ Whelan, managing director at Berkshire Partners, talked up the general strength of the gov tech market, with Whelan saying that “IT staffing shortages are becoming more acute,” which could further boost sales for Accela.

Accela said it posted a 31 percent increase in SaaS annual recurring revenue for its recently completed 2023 fiscal year. New accounts increased 36 percent, and the company said it has a net customer retention of 117 percent.

Another trend that favors Accela is the desire among public agencies to have tech relationships with fewer partners, Accela CEO Gary Kovacs told Government Technology. The company will continue to benefit from the push to “move everybody to the cloud,” and he would not rule out acquisitions.

Among the main challenges for gov tech as Accela goes about life with two private equity investors is speed, Kovacs said. Companies such as Amazon have trained consumers to expect quick deliveries; constituents increasingly expect that from their digital government services.

Accela says its tech serves more than 300 million people around the world.

The company recently released its Rapid Damage Assessment tool, an example of the ongoing rise of disaster management technology.

The cloud-based tech has new geospatial and mobile capabilities and is available through the company’s Civic Platform. Rapid Damage Assessment helps officials determine that safety codes are being followed, streamline permitting, and automate inspections and cleanup assignments, according to Accela.
Thad Rueter writes about the business of government technology. He covered local and state governments for newspapers in the Chicago area and Florida, as well as e-commerce, digital payments and related topics for various publications. He lives in Wisconsin.