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Cox Enterprises Inc., one of the largest private conglomerates in the United States, announced that it will acquire OpenGov in a deal worth $1.8 billion.
The company, a family-owned business that provides businesses such as communications and automotive services, had taken a minority stake in OpenGov ahead of today’s announcement, which will give it full ownership of the company.
Under the terms of the deal, OpenGov’s executive team and employees will roll over a majority of their stake, but they will continue to run the company under Cox’s umbrella.
San Francisco-based OpenGov is the creator of a city government software platform that assists with accounting, asset management, budgeting and other governance tasks. It is widely used by US cities, with clients including the city of Los Angeles, which is said to be using the platform to organize the 2028 Summer Olympics. Another client includes an unnamed county in Oregon, which is using OpenGov’s software to distribute funds more efficiently throughout the community to try to address homelessness.
OpenGov’s board of directors includes many prominent Silicon Valley figures, including former Cisco Systems Inc. CEO John Chambers, Palantir Technologies Inc. co-founder Joe Lonsdale and venture capitalist Marc Andreessen. Upon completion of the transaction, the board of directors will consist of a number of existing members as well as representatives from Cox.
OpenGov’s $1.8 billion valuation makes the company a leader in government technology. Israeli company Optibus Ltd. raised $100 million in a 2022 Series D funding round that valued it at $1.3 billion, making it one of the few government technology companies valued at more than $1 billion.
OpenGov said the acquisition will allow it to make “long-term strategic decisions” that will benefit its user base for decades to come. OpenGov founder and CEO Zac Bookman told the Wall Street Journal that the company will receive new funding from Cox to accelerate product development and make its own acquisitions to strengthen its products. “We want to give the government a more effective, more accountable government,” he said.
OpenGov believes that under Cox’s leadership it will be better able to deal with the risks of cyberattacks and ransomware, as well as a growing talent gap caused by government employee retirements.
OpenGov enables governments to accelerate digital transformation and promote the adoption of artificial intelligence and cloud-based technologies, said Dallas Clement, president and chief financial officer of Cox. He told the Wall Street Journal that the government technology industry has largely been left behind by these trends and that the vast majority of their IT operations are still located locally.
OpenGov has a total of about 1,900 customers in all 50 U.S. states, and the company said governments also use its platform for asset management, licensing, reporting and transparency. Its clients include state, city and county governments.
The company added that business has been going well recently, with total new sales in the fourth quarter growing 76% compared with the same period last year.
Headquartered in Atlanta, Cox is a 125-year-old company with annual revenue of approximately $23 billion. It has a long history of acquiring companies with local market expertise in industries as diverse as media, electric vehicles, electric vehicle supply chains, agriculture and clean energy. Some of its holdings include online car marketplaces Autotrader.com Inc. and Axios Media Inc.
The company is perhaps best known as the parent company of Cox Communications Inc., the third-largest cable TV provider in the United States with about 6.5 million subscribers. It also owns Cox Automotive.
Additionally, Cox has a strong presence in the government technology space. In addition to its minority stake in OpenGov, it also holds stakes in Carbyne Inc., a provider of emergency services technology, and Socium Ventures, a venture capital firm focused on the field.
The Wall Street Journal said today’s acquisition, one of the largest venture capital-backed software company exits in recent years, comes as the initial public offering market cools, making it more difficult for new startups to start trading publicly. difficulty.
Image: fanjianhua/freepik
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