The U.S. government signs more than 11 million contracts a year worth a combined hundreds of billions of dollars, a veritable goldmine for vendors. But federal contracting is a notoriously tough landscape for companies to navigate because of the associated red tape and bureaucracy.
Beyond applying to become eligible for awards from the government — which isn’t an easy process in and of itself — companies angling for contracts have to disclose proper reps and certifications, fill out various “standard form” documents and fulfill all the necessary federal acquisitions regulations requirements. On average, it takes months to more than a year before vendors see contract awards.
Mike and Nick Weiland are acutely aware of how difficult securing government contracts can be. The two founded a company, Telescope, to focus on “star” government contracting opportunities, but were soon forced to dedicate an entire department within the company to compliance and selling.
“It was clear that there was an incredible need for not only finding opportunities, but also the ability to collaborate and share opportunities outside of just email,” Mike, the startup’s CEO, told TechCrunch in an email interview.
After teaming up with a third entrepreneur, Jon Wright, Mike and Nick launched Govly, whose platform allows companies to assess, search for and analyze government contract requirements across disparate sources. Backed by Y Combinator, Govly recently closed a $9.5 million Series A round led by Insight Partners that valued the startup at $41 million post-money.
“Govly is a market network for public sector procurement,” Mike said. “Working from this singular platform, the risk of any entity in the supply chain not finding an opportunity, or seeing the notification that there was a modification, is mitigated.”
By default, Govly uses SAM.gov, the official site for tracking the eligibility of vendors to receive federal funds, to surface potential contract opportunities. But the platform supports other contract feeds, as well. Govly customers can create targeted searches to find particular types of contracts and get notified when a new opportunity matches their saved searches.
To enhance the quality of its contract searches, Govly uses a combination of third-party AI services, including OpenAI’s GPT-3.5 large language model and AWS Comprehend. Together, the services spotlight key parts of a contract opportunity, like the description, due date, customer and location, and normalize the different classification codes (e.g. North American Industry Classification System) the government uses for these opportunities.
In addition to searching across contracts, Govly can automate contracting workflows and help to coordinate tasks like initial solicitation, allowing businesses to collaborate with partners in response to solicitations and perhaps even identify new partnerships in the process. For example, a Govly customer could team up with another organization on Govly to share data and collaborate on government contract bids.
“Because Govly sells to the entire supply chain of government contractors, our value prop for each of the pillars — prime, reseller, distributor and OEM — varies slightly,” Mike explained. “Primes, who work directly with the government, leverage Govly to manage their own contracts and share information with their reseller partners. Resellers and OEMs leverage Govly to network with primes who can grant them access to contracting opportunities. Distributors leverage Govly to determine where their technologies are being requested in the federal space and to communicate with their reseller, prime and OEM partners on a particular opportunity.”
Govly has competitors, chiefly Bloomberg and GovWin. But it’s growing quickly, with annual recurring revenue hovering around $1.2 million and the expectation of reaching profitability by year-end 2023. Govly’s team of eight people is servicing a user base of around 400 organizations currently, ranging from paying enterprises to free, limited-access users.
The proceeds from the Series A will be put toward expanding the size of Govly’s team and growing the platform beyond primarily IT contracts into state and local education opportunities, Mike says.
“The U.S. government, being the single largest procurer of goods and services in the US and top two in the world, continues to transact business at an impressive rate — and Govly is assisting organizations in maintaining or finding new public sector relationships and contracts,” he continued. “Govly aims to solve the access issue by creating a network for the entire supply chain of government contractors to find, track, collaborate and win more business, from the small shops to the large enterprises. Instead of an emailed opportunity from the government
being forwarded from the ‘.gov’ to the prime to the reseller to distribution to the OEM, Govly makes it possible to collaborate and instantaneously share and work on the opportunity in a single platform.”