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Police Tech Problems Draw Interest from Venture Capitalists

20 August 2015   •   3 minute read

Most venture capitalists don’t anticipate finding prospective entrepreneurs at a murder scene. But that’s exactly where the Govtech Fund’s Ron Bouganim saw the CEO of his latest startup investment Mark43. Bouganim, the managing partner of the venture capital fund, recalled watching a news report about a shooting May 4 on the local NBC TV station in Washington, D.C.

“There was the local news, and then literally, there’s the CEO [Scott Crouch] of Mark43 in a flak jacket unfurling the caution-do-not-pass tape for the crime scene,” Bouganim said. “You can barely make him out, but there he was.”

Crouch had been on a ride-along. It was one of the hundreds of late night and early morning rides Mark43 has conducted since it launched as a police analytics platform in 2012. Bouganim said the story illustrated the kind of dedication and entrepreneurial obsession that’s catapulted the startup’s funding to $12.8 million. In a more recent round of funding on Aug. 3 the Govtech Fund, which exclusively targets govtech startups, was joined by top-tier firms like Spark Capital and General Catalyst to invest $10.8 million of Series A funding.

Bouganim said Mark43 is emblematic both of what a government tech startup can do and the rising interest from traditional venture capitalist firms.

Crouch was a junior at Harvard, when he and fellow co-founders Matt Polega and Flo Mayr created Mark43 as an all-in-one analytics cloud platform that provides police with data from different departments. It relays incident reports, can do background checks across multiple datasets, scans social media and phone records via warrants, and can even show a suspect’s criminal associations.

For their efforts, Forbes included the co-founders in its listing of top 30-under-30 enterprise entrepreneurs for 2015, while FastCompany magazine ranked Mark43 within its top 50 most innovative companies for 2015. This month the startup will deploy its technology throughout the Washington, D.C., Metropolitan Police Department and 30-plus federal agencies — a move affecting more than 15,000 government employees.

Already, the company claims its software has assisted law enforcement in the arrest of hundreds of sexual predators, gang members, murderers and violent criminals.

“I just keep banging the drum, this is a serious space, and there are serious startups,” Bouganim said.

Bouganim is a believer that the decades old govtech space — not to be confused with the civic tech industry — is undergoing a change driven by an influx of startups entering the market. The strong commercial interest can be traced to government’s need for affordable innovation and cloud technologies that enable small companies to scale rapidly. For evidence, Bouganim points out that most of the companies in the Govtech Fund’s investment portfolio have entrepreneurs under 30, and collectively, they boast an average government sales cycle of 86 days.

“We are gravitating to investments where the pain point is so great within the market that, one way or another — and with various procurement approaches — the buyer is saying, ‘I’m going to jump through whatever hoops I need to make this happen,’” Bouganim said.

In law enforcement the problem is the amount of paper records tied to antiquated data management systems. SceneDoc, a competitor and similar incident reporting solution piloted in Palm Springs, Calif., is estimated to potentially save the city thousands of dollars and would put additional patrol officers on the street. It would do this by eliminating the time officers take to transport reports to departments, grab signature approvals and file them into records systems. Palm Springs Sgt. William Hutchinson said officers spend an average of 45 minutes filing paperwork for an incident. On busy nights, officers can respond to as many as 15 incidents.

Given that kind of paper-based workload, law enforcement may be more than willing to part with old vendors in favor of Mark43. Bouganim said the fresh start and comprehensive approach was a big selling point for the investment.

“We’ve looked at a number of technologies in the law enforcement space, but the ones we looked at always seemed to be incremental,” Bouganim said. “Mark43 is completely rethinking the way that police departments would be organized, the way that officers would do their daily jobs, and you have everything from arrest reports to analytics — it’s the whole gamut.”