The deal values Neumo at $3 billion and stands as one of several large gov tech deals in recent weeks, a period of robust activity as investors continue to seek opportunities in this particular market.
Washington, D.C.-based Arlington Capital Partners already owned the two other companies: Avenu — which sells payment software and other tools to state and local governments — and Intellectual Technology Inc., or ITI, which focuses on technology for state DMVs.
Arlington did not disclose how much it paid for GovOS, founded in 2020 but which traces its roots back to 2009.
Paul Colangelo, the former CEO of Avenu, has taken over leadership of Neumo, whose name is meant as a play on “new momentum,” according to the statement announcing the deal.
The new company has more than 4,500 existing government clients across all 50 states. Neumo will help public agencies transform “manual, inefficient processes into streamlined, integrated solutions that empower agencies to operate with greater speed, precision and efficiency,” according to the statement.
“We certainly remain committed to delivering the best service,” Colangelo told Government Technology.
He predicted that Neumo will provide better response and support than the three separate companies, along with “expanded resources” as agencies interact with constituents through a variety of channels, from mobile phones to kiosks.
The typical investment period for a private equity firm is between three and seven years, depending on the source, with that period lengthening over the last decade.
Asked if he felt like he was “on the clock” because of the PE backing of this deal, Colangelo said that Arlington “understands what it means to invest in government. They have tremendous experience with gov tech. They are a really good partner from that perspective.”
Arlington says it has more than $8 billion under management in such areas as aerospace and defense, health care, business services and software and government services at the federal, state and local levels.
“Communities need modern governments capable of meeting them wherever they are, with digital technologies people have come to expect and rely on when accessing services,” said Michael Lustbader, managing partner at Arlington Capital Partners, in the statement. “Neumo meets this moment by bringing together excellence across a full suite of complementary gov tech software solutions that propel governments forward, while prioritizing user-friendly functionality that powers widespread adoption.”
The deal comes during a busy summer for the business of government technology, a period during which public safety tech supplier First Due raised $355 million, HR and compliance firm NEOGOV gained new owners in a $3 billion deal, and emergency communication provider Carbyne announced a $100 million funding round.
“The state of gov tech is as strong as it’s ever been and this is increasingly trending towards being the busiest year ever,” Jeff Cook, a managing director at Shea & Co. who advised GovOS, told Government Technology via email. “I think this deal is a continuation of what’s already been an active year with a healthy dose of private equity investments and strategic acquisition.”
That said, signs are emerging that private equity as a whole is slowing down, with one recent report calling PE activity in the first half of 2025 “muted.”
Such a slowdown potentially stands as one of the main reasons President Donald Trump this month issued an executive order encouraging more mainstream investment in private equity and other areas, which generally are considered riskier places to park money for less sophisticated investors.
Even so, there are fewer signs of a slowdown for PE when it comes to investments in digital infrastructure — an area that includes cloud migration, software as a service and cybersecurity — according to one analysis.
And this summer has brought no obvious signal that PE firms are tiring of government technology, where most recent activity has “been driven by private equity,” according to Cook.
“While overall PE activity might be described as ‘muted,’ the PE activity in gov tech is the polar opposite and I’d go as far as to say this has been the most active environment for PE in gov tech that I’ve ever seen,” he said, predicting more growth over the next few quarters.
