Subject: FW: Govtech Fund
From: "Neil Callahan \(Rosemont Seneca\)" <[email-masked]>
To: "'Hunter Biden'" <[email-masked]>, <[email-masked]>
Date: Mon, 10 Mar 2014 11:45:43 -0400

FYI - in our space, have Bezos and Case as LPs - I forwarded to rest of the
team as well.

 

Neil Callahan

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From: Per von Zelowitz [mailto:[email-masked]] 
Sent: Monday, March 10, 2014 11:35 AM
To: ncallahan
Subject: Re: Govtech Fund

And attached is a brief deck. 

On Mon, Mar 10, 2014 at 9:59 AM, Per von Zelowitz <[email-masked]>
wrote:

Neil - 

A good friend, Alex Duff <http://www.linkedin.com/pub/alex-duff/0/31/710> ,
is raising money for this fund. They have a worthwhile angle, some early
traction and I thought you may be interested. Not sure if RS is making any
LP commitments. Alex will be in NY over the next couple of weeks. Please let
me know if an intro is useful. 

Per

 

Govtech Fund is the first-ever venture fund focused on investing in startups
that are transforming the trillion dollar global government software & IT
market.  The opportunity is due to a confluence of three large trends:
budget constraints, sales cycle compression (largely due to software
development costs dropping significantly, enabling pricing below procurement
thresholds) and civil servant demographic/ cultural shift (1/3 of all civil
servants retiring in the next 10 years and the "new face" of CTO/ CIO is a
30-40 year old with an iPad in hand).

In addition to Ron Bouganim, an accomplished entrepreneur and investor, the
team also includes Tim O'Reilly - who is on the Fund's Investment Committee
and is actively involved.

Some recent developments since they started fundraising 9 months ago:

* $17M+ has been committed against a $25M target.  

* Steve Case <http://en.wikipedia.org/wiki/Steve_Case>  has signed on as the
anchor LP, subscribing to 20% of the Fund.  

* Jeff Bezos <http://en.wikipedia.org/wiki/Jeff_Bezos>  invested $2M.   

* Called $1M of capital from already committed LPs to make two "Pre-Fund"
investments: SmartProcure <http://www.smartprocure.us/>   and  MindMixer
<http://www.mindmixer.com/> .   Both startups are growing 10-30% per month,
having sold their platforms into hundreds of government agencies in the past
18 months and are on track to book multiple millions in revenue this year
(more detail below).

* First close mid-Nov was $7M   

* Final closing Q2/14

 

..........

1. SmartProcure

SmartProcure <http://www.smartprocure.us/>  is a competitive intelligence
database.  Target market is the 20 Million vendors that sell trillions of
dollars of items (eg. chairs, pencils, printers, etc) to the US Government
(Federal, State, City) every year.  The competitive intelligence data in the
SmartProcure database (eg. product price points, discounts, volumes, etc)
comes from detailed purchase orders that SmartProcure obtains from
government agencies, for free - via open data laws.   

* 800+ customers signed in first 10 months including Home Depot, Citrix,
Iron Mountain, Juniper Networks

* Revenue bookings growing 10-30% per month; have grown 10x since we
invested

* $1.5M+ in first year (2013) total bookings 

* price point is still at introductory level ($1,000/year), so lots of
upside price elasticity...for example: in September signed their first
multi-year deal - a $600K+ total contract value with a single customer

* Adding 2-3 new salespeople a month to keep up with demand.

* 2,500 government agencies in 9 states have supplied 65M+ purchase orders
(eg. these is how SmartProcure populates their purchase order dbase) and
growing...agencies get free access to the database which in turn helps them
save tens of millions of dollars.  Zero-friction supply of purchase orders
for SmartProcure. 

* New York City just moved its entire purchase order database to
SmartProcure.  

* On track to raise next round in Q2/14   

 

2. MindMixer

MindMixer <http://www.mindmixer.com/>  is an online forum product that
enables "idea co-authoring" in secure public forums.   Target markets
include government agencies (government->citizen), schools
(parents->teachers), corporates (employer->employee).   

* 600+ cities signed in 18 months

* $2M in 2013 GAAP revenue, $3.5M in 2014 new bookings 

* Received an acquisition 90 days after the Fund invested at 2x the Fund's
cost basis (company turned it down).   Rather, acquirer has just invested
$12M at 35% step-up to the Fund's investment; acquirer also received $5M/5%
warrant (at a $100M valuation) as part of this investment (sign of
confidence)

-- 

Per von Zelowitz
Marma Advisors 

M: 347 260 1666 <tel:347%20260%201666>   
E: [email-masked]

S: pervonzelowitz

T: @pvzed <https://twitter.com/pvzed> 

 

-- 

Per von Zelowitz
Marma Advisors 

M: 347 260 1666  
E: [email-masked]

S: pervonzelowitz

T: @pvzed <https://twitter.com/pvzed>