Gov tech companies make up about half of the firm’s portfolio, said Will Weatherford, manager partner for the firm and a Republican who held the speaker job from 2006 to 2014.
Those investments include OpenGov, whose cloud technology helps officials with such tasks as budgeting and citizen engagement, and SOMA Global, whose technology helps public safety agencies handle computer-aided dispatch, data interoperability, records and jail management.
Both companies are part of the GovTech 100 annual list from Government Technology.
The new Weatherford funding round, which recently closed, comes amid an increase in merger, acquisition and investment activity for sellers of technology to local and state governments — trends that look all but certain to continue and even gain steam into 2022.
Will Weatherford, who runs the company with his brothers, points to his political experience as giving them an edge when it comes to choosing how to invest in the gov tech space.
“I’ve seen firsthand how important it is for the public sector to have 21st-century technology solutions,” he said. “The investment community is waking up to that.”
As he and other experts tell it, the move to cloud-based and subscription software services is gaining more steam in the local and state public sector, thanks in large part to the pandemic and the lessons learned as government officials were forced to work from home.
“Government was forced to shut down and rely on old legacy systems that didn’t work,” Weatherford said.
Even though the investment and M&A picture remains rosy for the gov tech sector, potential obstacles remain. Among them is inertia, he said.
“There are still people in the space who are moving slowly,” Weatherford said. “Our hope is to invest in companies that offer a better and cheaper way to provide (public) services.”
Founded in 2015, Weatherford Capital has offices in Tampa and Dallas, and says it has a “preference for companies with a strategic focus on Florida and Texas,” two of the largest states in terms of population, and two of the most important states in terms of political power.
Data from Texas provides another look at the size of the market opportunity. The state has some 150 state agencies and more than 1,400 counties and municipalities.
A closer look at SOMA Global offers a closer look at Weatherford Capital’s thinking. The firm earlier this year invested $22.5 million into SOMA.
According to Jeff Cook, a gov tech expert and managing director at investment bank Shea & Co., that deal was notable because “there is a growing wave of SaaS-first business looking to modernize CAD/RMS, the foundation of the public safety market, and significant growth capital has assembled behind it.”
Weatherford Capital says it typically provides initial equity investments of between $10 million and $50 million, and that it manages more than $700 million in investments. The company plans to invest between $100 million and $150 million annually — not only in business-to-government efforts, but business-to-business as well.
