Well, the defense tech money tap isn’t showing any signs of shutting off.
On Friday, defense acquisition and sustainment software company Govini reported some pretty eye-watering numbers: They’ve officially raised $150M in new funding and reported $100M in annual recurring revenue (ARR) this fiscal year at a valuation of over $1B. Looks like the defense tech unicorn club has a new member.
Data dollars: If defense acquisition is your thing, you’ve probably heard of Govini.
The company’s flagship software product, Ark, is designed to simplify and speed up the enigmatic world of sustainment by integrating commercial and government data across supply chains, production, logistics, and modernization decision-making. Govini says their supply chain insights in Ark go deep—like, raw materials deep—and let users track things like ammunition as it’s used to forecast demand.
Ark’s proven to be pretty popular among the Pentagon’s procurement people. In the past year, Govini:
- Was selected as the logistics backbone for the Army’s Next Generation Command and Control (NGC2) program’s $99.6M prototype effort alongside Anduril, Palantir, Microsoft, and Striveworks in July.
- Won a 10-year, $919M blanket purchase agreement (BPA) from the General Services Administration and the Office of the Undersecretary of Defense for Acquisition and Sustainment (OUSD A&S).
- Secured several Army and Defense Department-wide indefinite delivery/indefinite quantity (IDIQ) contracts for supply chain analysis, including one last week.
Customer loyalty: Those big-ceiling BPAs and IDIQs, including an early $400M, five-year one in 2020, have been key to Govini hitting $100M in ARR.
“Moving forward, we are looking to continue to use those IDIQs. We’ve surpassed the ceiling on some of them, and we’ve obviously had some new ones awarded,” CEO Tara Murphy Dougherty told Tectonic at a media roundtable. “Our retention has been absolutely fantastic, so we’ve got all these renewing customers who come back year after year.”
“Of course, that’s the flywheel we want to see in a SaaS business like ours,” she added.
Seeing green: The ability to reach the ceiling on big-dollar IDIQs and BPAs, which basically lets users hit the buy button at will, clearly caught the eye of investors. Their $150M raise, led by Bain Capital, values the company at a whopping $1.25B.
“We had a lot of offers, because it’s unique to find a company with our growth rate, which is more than 100% on a three-year CAGR [Compound Annual Growth Rate],” Murphy Dougherty said. She added that Govini plans to use the fresh capital to “continue to grow at an astronomical rate” and expand across the Department of Defense and other government agencies.
“We estimate that there are roughly 1.2M people out of the 3.7M Department of War employees that work on some part of the acquisition process, and we’re touching a tiny, tiny portion of them today,” she said. “Our goal is certainly to go get Ark in the hands of all of those people.”