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Cox Buys Majority Stake in OpenGov, Prompting $1.8B Valuation

Cox Enterprises’ investment caps a busy fourth quarter for OpenGov — and makes it one of just a few gov tech companies with a value of $1 billion or more. Plans are for its workforce and leadership to remain in place.

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Cox Enterprises, which backs gov tech companies and has a focus on emerging businesses, has purchased San Francisco-based OpenGov, which sells software for budgeting, planning, procurement and other tasks — giving the latter a $1.8 billion valuation.

The deal, which OpenGov’s CEO called one of the largest ever seen in gov tech, makes Cox a majority shareholder — but it doesn’t own the entire company. The exact amount of the investment was not revealed.

“OpenGov management and employees will still maintain equity, but yes, Cox now owns the majority of OpenGov,” company spokesperson Jennifer Amin told Government Technology via email. The purchase, she added, did not net Cox 100 percent ownership of the gov tech provider. OpenGov, Amin said, is hiring for more than 70 open roles, and its workforce and leadership will stay in place.

“With this investment, one of the largest in gov tech history, we intend to accelerate product development, advance our mission and improve communities for generations,” said Zac Bookman, OpenGov co-founder and CEO, in a statement.

The new valuation of OpenGov puts it in rarefied company — making it one of the few gov tech firms with a value of $1 billion or more. Israel-based transit software provider Optibus is among the firms that has made it to that level; it said in 2022 that its value hit $1.3 billion after a $100 million Series D funding round.

The deal highlights the growing appeal to investors of cloud-based and AI-backed services for state and local agencies, and factors in the ongoing movement of fresh capital to the government technology sector.

OpenGov, a privately-held firm, said the new investment will help the company “make long-term strategic decisions that will benefit customers for decades to come.” Cox’s initial investment in OpenGov came in 2021.

The California-based seller launched in 2012 and has raised at least $178 million, according to Crunchbase.

The company says it has about 1,900 customers in all 50 states, who also use the firm’s tools for permitting, asset management and reporting and transparency. Clients include states, cities and counties.

Earlier this year OpenGov reported a 76 percent year-over-year increase in gross new sales in the fourth quarter of 2023.

Another example of the company’s growth comes via its 2022 acquisition of Cartegraph Asset Management. That operation now manages more than 48 million “infrastructure assets” in the U.S. That’s up 36 percent year over year as of Q4 2023.

OpenGov has positioned itself as a supplier of software that can replace public-sector legacy systems, offer higher levels of cybersecurity, and ease the labor shortage in government IT.

As for Cox, it also backs other gov tech companies, including emergency call technology provider Carbyne. Last year Cox launched Socium Ventures to focus on emerging businesses, including in the gov tech space. Amin said this new deal didn’t come from Socium, which focuses on $3 million to $25 million investments in venture stage companies.

OpenGov was backed by private equity with Weatherford Capital, a Florida firm involved with the company since 2019, Will Weatherford, managing partner, told Government Technology. Private equity is a growing presence in the gov tech world. Weatherford Capital led OpenGov’s Series D funding round.

All investors are being bought out, Amin said. That includes Weatherford, though the firm will continue to invest in gov tech.

“We are confident that Cox Enterprises shares OpenGov’s long-standing vision for government modernization,” Weatherford said via email. “This partnership will propel OpenGov to new heights within the industry.”
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.