By Bobby Yazdani, Founder & Partner at Cota Capital
Every time I’ve invested in a startup with a mission beyond just making money, the results have exceeded my expectations. OpenGov, a leader in cloud software for government, is a perfect example of that. The company just received a majority investment from Cox Enterprises in a deal valued at $1.8 billion. I’m proud to say that this is one of the largest govtech transactions ever and, according to the Wall Street Journal, the largest venture-backed software exit in recent memory.
OpenGov serves more than 1,900 U.S. cities, counties, state agencies, and school districts with cloud applications for budgeting, accounting, procurement, and asset management. With OpenGov, local and state entities can operate more efficiently, adapt to change, and strengthen public trust.
My involvement with OpenGov dates back to 2012 when I became an early investor in the company. I was introduced to OpenGov by its co-founder, Joe Lonsdale, as I had previously invested in one of Joe’s earlier companies, Addepar.
Those days were the start of the first major cloud cycle. There were thousands and thousands of on-premise systems that needed to be shifted to the cloud. As an early investor in Salesforce, I had direct insight into the cloud market and the economic value it could create for customers. My big thesis at the time was that government, in particular, had a massive opportunity to save money and create new efficiencies by shifting their digital processes and software stack to the cloud.
David vs. Goliath
Of course, there was one big problem. Software behemoths like Oracle and SAP already had a dominating presence within the government market. This was a real David vs. Goliath situation, and not many people thought that OpenGov would be able to slay the giant. But I love investing in underdogs—especially in underdogs with a clear mission and vision.
The team at OpenGov, led by CEO Zac Bookman, cares deeply about our country and wants to make government more efficient and transparent for everyone. In fact, before co-founding OpenGov, Zac served multiple tours of duty as an advisor to U.S. Army General H.R. McMaster on the Anti‑Corruption Task Force in Kabul, Afghanistan. His commitment to serving our nation and creating a company to improve government was refreshing to me, especially as a Silicon Valley investor.
Power to the people
OpenGov’s vision was bringing best-in-class cloud software to state and local government. Their mission was to empower citizens by creating a technology platform that ensured the government was working as it should be.
One of their early ideas was that the government should be able to publish its budgets in real time so citizens could gain a clearer understanding of, for example, how much their local fire department was spending. The belief was that this kind of transparency could only help to strengthen the government. Today, one in three people in the U.S. is benefiting from OpenGov software.
Zac turned out to be a fabulous leader. In truth, building this business was no easy feat. He and his team had to adapt their product and go-to-market strategy numerous times throughout the journey. They were constantly developing and improving their technology based on feedback from their customers. Zac was a master at navigating the company through all these obstacles and setting the tone from the top. He was also great at raising capital and convincing investors that investing in government technology was the right thing to do.
The perfect partner
Cox is the perfect partner for OpenGov at this point in their journey. Zac and his team did a stellar job growing the company, but having a dedicated backer like Cox is essential to taking the business to the next level. Cox has a proven track record of investing in mission-driven companies and empowering those organizations to build for long-term impact. I’m confident that Cox will serve as an enabler for OpenGov to further accelerate product development and advance its goal of improving communities and empowering citizens.
Going forward, I firmly believe that digitalization will strengthen the government and create even greater transparency for citizens. With this sale, OpenGov is in an even stronger position to execute on that worthy mission.