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Startup ZenCity Raises $6M from Investors, Including Microsoft's Venture Arm

The company analyzes 311 data and other citizen feedback sources to give local government a view into performance and sentiment.

ZenCity, a startup that aims to give local government better insight into citizen sentiment and measure the outcomes of policy decisions, has raised $6 million from investors, including M12, Microsoft’s venture capital arm.

The Series A round brings the company’s total funding up to $7.7 million. With that money, the company plans on opening an official U.S. office — or multiple, perhaps — and doubling its employee count from 20 to 40.

ZenCity’s main users are city managers, who use it to identify the way citizens feel about selected issues. When it participated in the Startup in Residence program, it used its platform’s artificial intelligence capabilities to help San Francisco better classify 311 requests and more accurately route them to the right people. 

The company is from Israel, though its founders have been spending quite a bit of time in the U.S. as ZenCity has started building out its footprint here. According to Eyal Feder-Levy, the company’s CEO and co-founder, the company is up to 30 customers. Half are in the U.S., spread across eight states.

“All of that is from this year … we started marketing in the U.S. less than a year ago,” Feder-Levy said.

Those U.S. government clients include the cities of San Antonio, Ft. Lauderdale, Fla., and West Sacramento, Calif.

Feder-Levy said the company has been able to sign on new customers quickly because it designed its onboarding process for speed. It has already integrated its product with the most commonly used 311 systems — a major source of its data, which it uses to identify resident sentiment.

“In the few cases we’re [integrating with] a new kind of software, we build it out so next time it’ll be easier,” he said.

The company has also made a point of working with local officials to find the fastest contracting options. Sometimes it will go through a bidding process, sometimes it will come in under the threshold at which bidding is required, sometimes it finds alternative contract vehicles.

All in all, he said, the product usually goes live in a city two weeks after it signs the contract.

“City managers being senior decision-makers, when they want something, it tends to go pretty fast,” Feder-Levy said.

Looking forward, he said the company is exploring the idea of adding citizen-facing user interfaces to its product with the aim of collecting feedback directly from them on events and decisions.

“We think that that increases the trust between the city and the residents,” Feder-Levy said.

The funding round was led by Vertex Ventures and also included participation from Canaan Partners Israel. CPI and M12 had both previously invested in ZenCity; the company recently won a $1 million competition prize from M12 aimed at artificial intelligence startups.

M12 substantially increased its stake in ZenCity with the new round, Feder-Levy said.

“That was quite exciting for us, because they don’t have a lot of gov tech startups in their portfolio; we’re one of the first,” he said.

Ben Miller is the associate editor of data and business for Government Technology. His reporting experience includes breaking news, business, community features and technical subjects. He holds a Bachelor’s degree in journalism from the Reynolds School of Journalism at the University of Nevada, Reno, and lives in Sacramento, Calif.
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