[PreMoney SF 2015] Govtech Fund >> Ron Bouganim, "Out With The Old, In With The Govtech: How SaaS Startups Are Disrupting The Public Sector (A Trillion $$$ Global Market Opportunity)"

Software Is Eating Government: The 86-‐Day Sales Cycle

Ron Bouganim

Managing Partner

Private and Confidential @GovtechFund

•  22 Million employees (3M Federal, 5M State, 14M Local)

•  15% of entire the US workforce

•  DJIA: Microsoft, Exxon, Home Depot, McDonalds, etc: 6 Million

•  $7 Trillion spend; market cap of DJIA: $5 Trillion

•  Market cap of Apple+Google+Alibaba+Facebook+Amazon+LinkedIn+: $2.4T

•  100,000+ government agencies, departments

US Gov’t: Single Largest “Company” in America


What is Govtech?

Definition govtech, n. (gov-‐tek)

the technology infrastructure that governments use to manage

internal operations and deliver services to citizens


Government’s “OS” •  procurement •  law enforcement •  GIS mapping •  tax collection / fraud •  budgeting •  pension liability •  bond issuance management •  healthcare

What Govtech Isn’t?

govtech civictech Citizen’s “OS” •  community organizing •  petitions •  advocacy •  elected officials comms •  elections


What is Govtech?

US: $175 Billion / Year

Global: $1 Trillion / Year


A Massive Problem

The Veterans Affairs Department canceled its patient scheduling system -- spending $167 million over eight years and failing to deliver a usable product.

Legacy Vendors

Gov’t Contractors

historically no startups no innovation tech from the 80’s and 90’s!


Enablers Of A Trillion Dollar Opportunity

Budget Constraints

+ Cloud Sales Cycle Compression

+ Civil Servant Retirement/Cultural

+ Open Data

= Multi-‐Decade, International Cycle

As Software Eats Government


Timeline: Where Are We?

Next 10 Years Past 10 Years

Web 2.0

Govt 2.0 Movement

Open Source Movement

Open Data Movement

Cities “Getting It”

First Govtech

Accelerator

Code For America

Launches

Civic Commons: 650 Apps,

275+ Cities

International

Thousands of Govtech Startups

Expansion to State, Federal

Thousands of Cities


A Little About Me

o  14 investments since 2007 o  3000+ hours with companies o  19.6x portfolio revenue growth o  3.5M average pre-‐money entry point o  $35M in follow-‐ons by Khosla, Social

+Capital, Greylock, August, Baseline, Floodgate, Northbridge

o  4 companies have 10x potential o  IRR: 50% realized, 100% unrealized

Investor

Entrepreneur

o  Co-‐founder, early management 5 startups (CEO, COO, VP Corp Dev) :

o  Raised $300M in venture capital, vendor financings

o  7 M&A transactions

Non-‐profit

o  Donor, advisor, board member:

Limited Partner


•  $23M fund launched 9 months ago

•  Focus: start-‐ups that are transforming the trillion dollar+ global government software market

•  Seed/Series A investor

•  5+ years analyzing and working in the space

•  Launched first-‐ever govtech accelerator

•  6 investments to date

•  $5M invested, $40M of follow-‐on / co-‐invested capital

Introducing…the Govtech Fund


Portfolio: Overview

procurement marketplace

urban planning big data

law enforcement

GIS platform in the cloud

government forms

long term liability analysis


Portfolio: Govtech Startup Characteristics

•  SAAS

•  B2G: government is the customer

•  Proprietary Technology, Patents

•  Engineering Centric

•  Multi-‐Agency, All Levels (City, State, Federal)

•  Maximum 1-‐2 Quarter Sales Cycle

•  Not regulatory plays, no lobbying

•  Founder DNA

these are enterprise SAAS startups just addressing a new vertical


Portfolio: Velocity


Portfolio: Velocity

•  Average sales cycle: 86 days •  20% CAGR

•  2x, 2x, 2x

•  1/day •  $300K, 14 days

Ron Bouganim

Managing Partner

follow us at: @GovtechFund

Investor Relations

[PreMoney SF 2015] Govtech Fund >> Ron Bouganim, "Out With The Old, In With The Govtech: How SaaS Startups Are Disrupting The Public Sector (A Trillion $$$ Global Market Opportunity)"