“The coronavirus outbreak stresses the U.S. government’s need for commercial tech solutions that are fully vetted and equipped to support government missions today,” Metzger said in a blog post at the time. “Plus, the federal market is an opportunity for tech companies looking to diversify their revenue, which is even more important now.”
One year later, Dcode Capital has hit the ground running, offering connections for non-government tech companies looking to break in, or experienced orgs that are offering new products. The invite-only network connects angel investors and venture capital firms looking to make larger investments with the tech startups serving the government sector.
Dcode Managing Director of Tech Programs Rebecca Gevalt told Technical.ly this month that Dcode Capital was developed in response to tech companies looking for an advisor when it come to investments in federal government technology. Across the board, she said Dcode has worked with over 110 tech companies with government-facing products.
“It was a way for these people to still engage with these tech companies and [fulfill] that mission of bringing the best tech into government,” Gevalt said.
Dcode Capital has also brought funding for the tech companies. Since the launch, it has invested several million dollars, Gevalt said. Dcode participated in an $80 million raise for document automation company Hyperscience, and a $16 million round in threat detection company Hyas.
A shift in programming also changed how it engaged with tech companies and how it established connections within Dcode Capital. In December 2020, Dcode stopped operating on a cohort model. It now has support on varying levels for companies instead of offering those services through a group, and allows startups to apply anytime. To do this, Dcode offers access to Nexus, an online platform that gives tech companies a crash course in providing technology to the government, as well as a network of federal and tech leaders.
According to Gevalt, this means Dcode Capital now has access to a broader range of companies that can turn into investment connections.
“From an investment perspective, we now have a much wider aperture of companies that we’re able to take a look at and identify investment opportunities for our network,” Gevalt said.
Dealflow in Dcode Capital, Gevalt said, tends to come in three different forms: companies from the current alumni portfolio approaching Dcode, that same network referring other companies and inbound requests from the government looking to solve problems with tech. Dcode is able to then take those requests and investment opportunities to Dcode Capital’s network.
Gevalt said Dcode Capital is “stage-agnostic,” working with “Series A all the way to Series E companies.”
“We’re working hand in hand with their C-suites, their federal sales teams,” Gevalt said. “We see how the product resonates inside government. We know how the government is responding.”
Going forward, Gevalt said Dcode Capital’s big goal for the rest of the year is to expand the network even further. She said that throughout the pandemic, the federal marketplace has only gotten more important for tech companies, as they both recognize the economic stability of the government space and realize that there’s still room for the government to grow in tech.
With Dcode Capital, Gevalt said she hopes the growth that she’s seen over the past year continues, and that it can continue offering insight on both sides of the coin: knowing what the government wants, and knowing what tech companies are out there and offering.
“We sit between those two worlds, understand the best parts of both and bring it all together,” Gevalt said.