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Zencity Raises $30M, Plans New Product Amid Rapid Growth

The startup has more than doubled its customer count during the pandemic as governments look for ways to stay in tune with residents. Now its investors are doubling down and Zencity is planning a new survey product.

Blue digital gridlines forming a 3-D image of a city as seen from above.
Fresh off its first acquisition and a year of fast growth, the gov tech startup Zencity has raised a $30 million investment round.

Next up, it will look to hire more employees and put out a new product.

The company, which makes software to help government analyze the sentiment of the public through social media and polling, has benefited from the public sector’s need for information during the pandemic. As health departments, economic development teams and other local officials scrambled to manage business restrictions and the COVID-19 outbreak, many turned to companies such as Zencity for better insight into how those changes were playing out in their communities.

The result is that Zencity has more than doubled its customer count from about 100 agencies to 220, tripled its revenue, and entered the market in Australia and the United Kingdom.

Then, with the acquisition of Elucd in March, it added the ability to survey residents directly.

“Almost all of the Elucd customers are now using both Elucd and Zencity, and I think more than a dozen Zencity customers are already using Elucd capabilities,” said Eyal Feder-Levy, Zencity’s CEO. “So first and foremost, a lot of our customers are buying into this notion that the mix of organic and proactive input is a whole that is larger than the sum of its parts.”

The funding, which comes entirely from previous backers, brings the company’s total fundraising to $51 million. The backers were TLV Partners, Vertex Ventures Israel and Canaan Partners Israel, along with the investment arms of tech giants Microsoft and Salesforce.

“To me, that was a huge show of confidence. You know, these are the people that know us best, right? They sit in all of our board meetings, they know the good and the bad,” he said. “And the fact that they chose to lead such a significant round, which was such an up round from our previous funding, was a very humbling show of confidence.”

Feder-Levy said the round will allow the company to hire more people in order to build up its software.

“What we’re going to be doing with this funding round is we’re going to be doubling down a lot on product,” he said. “We’re going to be investing a lot in building more capabilities, both to collect feedback from communities and to analyze them in a way that makes it effortless for the local government partners of ours to make sense out of hundreds and thousands and millions of feedback points.”

The company has already integrated Elucd’s software into its own and begun adding features to help customers make the most of both. For example, when an agency conducts a regular survey and registers a change in opinion, Zencity can pull in social media posts on that topic to try to give the user some more information about why.

In coming months, Feder-Levy said the company will also seek to put out a new product that will take the Elucd concept — which was largely serving law enforcement before the merger — and look to apply it to more areas of local government.

“Over the last few months, we’ve been working on taking the same technology and generalizing it into the more general city use case — [measuring] ongoing satisfaction in a recurring survey on more general city management, local government-type topics,” 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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