The COVID-19 pandemic has driven greater investment into the govtech sector, causing a surge in development, deployment, and investment in tech-based innovations as pandemic accelerates digital transformation of governments, according to a recent report from London-based advisory firm StateUp.
The report, “StateUp 21”, explores digital and new technologies designed for the public sector by analyzing over 450 GovTech start-ups around the world and identifying 21 companies that it describes as the “most promising”.
According to the report, “Top” GovTechs secured £500m (about $686m) of investment over the past year, including mobility solutions provider Via which secured US$200 million in March, transportation robotics MIT-spinout Superpedestrian (US$60 million in December) and AI insights company Zencity (US$13.5 million in August), Cities Today wrote.
Tanya Filer, Founder and Director, StateUp, and Lead Researcher on Digital Government at the University of Cambridge, told Cities Today: “Govtech may also be benefitting from a broader shift in investors’ perspectives towards ‘impact’ investing.”
She said there are signs that VCs are more frequently seeking investment opportunities in companies that can do some material good in the world.
Much more money is predicted to be invested into the sector in 2021, with national and local governments doubling down on digitalization and resilience.
Filer said: “Resilience-building in a post-pandemic world is the driving force behind new investment into govtech, a relatively young sector that is growing rapidly.
“Although traditionally govtech has been seen as a long-term investment, 2020 has shifted the landscape dramatically, with investors showing a burgeoning interest in technologies to support both public sector efficiency and accountability, and a green recovery. What was once a sector showing low reward over a period of years or decades is now a promising sector that is of growing interest to investors, entrepreneurs and government alike.”
To access the full report, click here.