Pandemic drives half a billion pounds into top GovTech start-ups
StateUp, an insights and advisory firm focused on digital innovation with public purpose, has created a first of its kind research report, called StateUp 21, providing detailed analysis on the global GovTech sector. According to the research, GovTech, a historically underfunded sector, has a promising future; GovTech startups have secured £500m in investment in the last year with much more money predicted to be invested into the sector in 2021.
The StateUp 21 report aims to help public servants understand available technologies, and entrepreneurs and investors to understand the government market, shows that investor perspectives have shifted.
The report provides detailed analysis on the types of startups and sub-sectors that are of interest to Governments and stakeholders. It explains how over a third (36%) of administrative tech startups report having some AI/ML or Robotic Process Automation capability and a third (27%) claim to make use of some form of AI or machine learning.
Digitalisation is increasingly a major factor of many government strategies, as proven by the announcement by the Biden-Harris administration to invest over $10bn into US Federal Government technology programmes.
Tanya Filer, Founder and Director, StateUp and Lead Researcher on Digital Government at the University of Cambridge 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.”
Core to this boom in GovTech development and investment is the recognition of a new digital focus by governments, who have been forced towards digital adoption through the pandemic, and are beginning to focus on recovery efforts. UK Government, for example, announced the appointment last week of three senior Digital, Data and Technology (DDaT) leaders to boost capacity in digital government over the next few years.
StateUp has curated a list of 21 of the most promising start-ups within the sector, which are profiled in detail. The 21 members of the inaugural StateUp 21, includes companies from all over the world, including UK-based businesses such as Logically, which tackles misinformation, and data privacy company Privitar. Mobility business Trafi from Lithuania also makes the inaugural list, as well as healthcare startup healthy.io from Israel and Indian supply chain management company Logistimo.
According to the report, infrastructure and the built environment is StateUp’s GovTech ‘subsector to watch’ this year. The subsector currently accounts for 10% of startups recorded in Nebula, the company’s intelligence database, and focuses on companies developing and managing built assets and infrastructure (such as bridges, roads, homes, airports) that are sustainable and will last for many decades.
It anticipates this share rapidly increasing as policymakers around the world look to the sector to encourage a green recovery, and use their procurement power around public infrastructure and public buildings to lead the way. Taking the UK as an example, built environment assets are responsible for roughly 40% of the country’s total carbon footprint. Approximately a quarter of construction output is by the public sector, making public procurement a clear vehicle for change.
This was posted in Bdaily's Members' News section by Andrew McKay .
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