Holdings firm GTY Applied sciences acquired DemandStar, a Seattle startup that gives a public sector bidding market.
“We’ve had fairly a little bit of inbound curiosity because the tech sector as an entire has been consolidating, so we had a alternative of companions,” DemandStar President and CEO Ben Vaught informed Startup. “We selected Bonfire and GTY Applied sciences due to how nice they’re with their clients and the quantity of buyer worth I believed we may create collectively shifting ahead.”
DemandStar offers 1,300 businesses a spot to put up request for proposals (RFP). Distributors can then suggest bids on these requests. The startup makes cash by promoting annual subscriptions to companies for notifications of presidency contracting alternatives. It was beforehand owned by Seattle-based Onvia, which offered to Deltek, a division of Roper Applied sciences, in 2017.
Vaught took out a mortgage on his home to purchase an present base of consumers and legacy software program from Deltek in late 2018, and raised a small angel spherical earlier than nabbing a $2 million seed spherical in 2020 led by Model One Ventures.
The pandemic was a “key driver of development” for DemandStar as a result of it accelerated the pattern towards digitization of presidency providers, Vaught mentioned. Authorities spending is counter-cyclical, he added, that means the slowdown within the broader financial system shouldn’t be affecting the startup’s enterprise.
DemandStar will probably be becoming a member of GTY’s Bonfire unit, which sells sourcing and procurement software program to greater than 650 authorities businesses throughout North America. Bonfire and DemandStar will finally merge, providing a “full portfolio of cloud-based procurement options to each state and native public businesses of any dimension or requirement,” in line with a information launch.
The deal took about six months to finish, and phrases weren’t disclosed. Following the acquisition, DemandStar will maintain its branding. The startup has 15 staff, and all have been supplied a place at GTY.
“It’s all arms on deck for this quickly digitizing trade proper now, and the standard of the DemandStar crew was a key piece of the acquisition,” Vaught mentioned.
GTY is a portfolio firm of GI Companions, a personal funding agency with places of work in San Francisco, New York, Dallas, Chicago, Greenwich, Conn., Scottsdale, Ariz., and London. Based in 2001, the agency has $35 billion value of belongings below administration.
DemandStar raised a complete of $2.8 million from buyers. Backers embrace Model One Ventures, Forefront Enterprise Companions and Advance Enterprise Companions.
Boris Wertz, a companion at Model One Ventures, led the seed spherical in DemandStar in Summer season 2020. The deal got here collectively with out a single in-person assembly given the continued COVID-19 disaster on the time.
“Now that we’ve offered, he’s now accomplished the whole funding cycle with out us ever having met nose to nose,” Vaught mentioned.