Philadelphia-based govtech company FSH Technologies has secured $25 million in total funding to accelerate its nationwide expansion, aiming to replace the traditional consulting model that dominates government software procurement. The latest round includes a $20 million investment led by Lachy Groom, an early backer of companies such as Figma, Notion, Ramp and Lattice, with participation from Acrew Capital, Operator Partners, Contrary, Cooley and several individual investors. An earlier $5 million round included Contrary, Acrew and General Catalyst.
Cities, states and school districts spend roughly $160 billion annually on technology, much of it directed toward consulting firms that bill by the hour or legacy software vendors acquired by investment firms. FSH founder and chief executive Lilly Chen argues that hourly billing creates misaligned incentives, as consultants profit from prolonged engagements rather than efficient delivery. FSH’s model ties revenue growth to client satisfaction: the company expands only when a government agency voluntarily increases the scope of its contract.
The approach is showing early traction. Since pushing for expansion in the second quarter of 2026, FSH’s recurring revenue has grown sevenfold, and potential business within a third of existing clients has surged by 1,340 percent. The company targets $450 million in annual revenue by 2028.
Real-world deployments underscore the demand for speed. Pittsburgh Public Schools switched to FSH after a security breach at its previous vendor exposed student data. Buffalo abandoned a decades-old system that could no longer meet operational needs. In Philadelphia, FSH built a multilingual tax-support program in 30 days that helped more than 1,000 small businesses file in 13 languages after a new city tax caught many off guard.
FSH currently operates in Buffalo, Denver, Philadelphia and Pittsburgh. With the new capital, the company plans to extend its presence to all 50 states within a year. The product roadmap will expand beyond core municipal and school-district systems to include emergency medical services and police scheduling, transit management and case management. Most of the funding will go toward product development, sales and hiring, with plans to quadruple the team. The focus is on engineers, designers and staff who work directly with government clients.
Investors are betting that the govtech sector needs founders willing to tackle the unglamorous work of modernizing public-sector infrastructure. By aligning its incentives with the outcomes governments actually need, FSH aims to replace a patchwork of legacy tools with a single platform that works by default.
