Zencity Raises $13.5M For Government Tech

Tel Aviv-based government tech startup Zencity has raised $13.5 million to help local governments figure out how to best serve their residents.

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Zencity aims to help local governments make better decisions by understanding the needs and priorities of the community, CEO Eyal Feder-Levy said in an interview with Crunchbase News. The company looks at what people are talking about and collects its data from sources like public social media posts, local news reporting, and a municipality’s own customer service capabilities (emails, 311 calls, etc.). The company anonymizes all the data it collects and analyzes it so city leaders can better understand what residents want.

The goal for most local governments is to provide quality services to their communities. But that’s difficult to measure, and it can be challenging to ascertain what residents want.

“It’s easy for a company to measure its success,” Feder-Levy said. “We measure on revenue or growth or traction. … in the public sector the challenge is a little bit different because they don’t optimize for revenue.”

Zencity works with 150 local governments, including those of large cities like Los Angeles and Chicago and smaller towns like State College, Pennsylvania. The company works with municipalities in four countries and across 29 states in the U.S. 

The COVID-19 pandemic has made the need to understand residents’ priorities even greater, Feder-Levy said. Local governments are often those making the rules to require masks, enforce social distancing guidelines, and provide other precautionary measures. The company has brought on 40 cities since COVID-19 was declared a pandemic.

“Local governments are really on the front lines of handling the COVID-19 pandemic. … So that need really drove local governments to acquire a much shorter feedback loop from their residents on a more regular basis,” he said.

With the new funding, Zencity will be investing in expanding product capabilities to “serve cities for the changing realities,” Feder-Levy said. It will also help the company, which grew by 3 times last year, expand in the U.S. and other countries.

TLV Partners led the round with Salesforce Ventures1 joining in as a strategic investor, according to the company. Existing investors Canaan Partners Israel, Vertex Ventures, M12 and i3 Equity Partners also participated in the round, which brings Zencity’s total funding to a little over $21 million.

Illustration: Li-Anne Dias