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For a number of startups, government transparency isn’t just a political talking point — it’s a lucrative business opportunity.
Their public-interest pitch is that the antiquated technology governments use to collect and store information makes it difficult for them to manage their own budgets and adequately plan for the future. The business angle is that governments are great, long-lasting customers, and there’s a lot of money to be made by helping them organize their data.
Marc Andreessen agrees with both arguments, but the latter one is probably why he’s joining the board of OpenGov, a data-focused civic tech startup that makes a cloud-based software toolkit to help public servants sort out their data. Today, OpenGov is also announcing that it has raised a new $25 million round from Andreessen Horowitz, Thrive Capital and other investors.
In a phone interview, Andreessen started with the civic interest case for why governments should be using the services of companies like OpenGov or Socrata.
“In most cities and places, this stuff doesn’t exist or it’s inaccessible. It’s transparency for people who run government, and for citizens whose tax dollars are being spent,” Andreessen said. “Government spending by law is supposed to be public — this is all tax dollars, this info is all public. It’s just a difference between public and opaque, and public and transparent.”
Andreessen also spoke about why he’s bullish on OpenGov’s business model and its ability to navigate the complex government procurement process. He compared the startup to Palantir, the secretive $20 billion tech company with military contracts, and called OpenGov “one of the small number of very serious vendors that people know of and rely on.”
OpenGov says it has more than 500 customers in more than 44 states, including the cities of San Diego, Pittsburgh, Miami and Minneapolis; its customers are effectively all at the state and local level. Last year, the company raised $15 million in Series B funding. The investors in the round announced today are Formation 8, Andreessen Horowitz, Thrive Capital, AITV, Sound Ventures and Intuit founder Scott Cook. OpenGov’s CEO is Zac Bookman, who is also a partner at Formation 8, and the board chairman is Joe Lonsdale, a founding partner of Formation 8 who was also a co-founder of Palantir. Like Andreessen, Lonsdale has well-known libertarian leanings.
Civic technology is a sector of the industry that’s mostly a mishmash of nonprofits, startups and outreach divisions within large tech companies like Google and Microsoft. It doesn’t generate the kind of major returns that traditional VCs look for, and it’s a convenient entry point for politicians who want to reach out to Silicon Valley. If you’re interested in reading up on the space, the Knight Foundation released a comprehensive report in 2013 that’s a little dated but still useful.
Andreessen says that he imagines OpenGov’s long game is to get the federal government to adopt its tools, which is a loftier (and more bankable) aim than most other civic tech startups. His vision for the company is that stuff like its simple, centralized data console becomes ubiquitous, opening up a data repository whose information helps all citizens make more informed choices.
“Imagine a mayoral debate, imagine the moderator putting up the [OpenGov data management] dashboard. Instead of a very abstract ideological debate, let’s actually take a look at the spending and take a look at the results,” Andreessen said. “Government doesn’t have competition. They’re not going to go out of business because they have a monopoly, unless you show transparency and give people comparisons.”
This article originally appeared on Recode.net.
