For decades, cities and school districts bought software by hiring a consulting firm and paying by the hour. FSH Technologiesraises$25M to replace this consulting method for speedy results. The Philadelphia-based govtech company announced $25 million in total funding.
That funding includes a $20 million investment led by Lachy Groom. He was an early investor in big software companies like Figma, Notion, Ramp, and Lattice. Acrew Capital co-led. Other firms like Operator Partners, Contrary, and Cooley also invested, along with several individual investors.
Before this, FSH raised $5 million from a group that included Contrary, Acrew, and General Catalyst. The new capital will fund a nationwide expansion. FSH plans to go from 4 cities to all 50 states within the year.
The $160 Billion Problem That FSH Solves
Cities, states, and schools spend about $160 billion a year on technology. Right now that money mostly goes to two types of companies:
- Consulting firms charge by the hour, so the longer they take, the more they make.
- Software companies that get bought by investment firms, then collect fees without improving the product.
Lilly Chen, founder and CEO of FSH believes that per-hour billing is why consulting can never lead to government efficiency. As a response, FSH built the opposite model.
Chen explained that “we only grow when a city or school district loves our solution and expands the scope, so the incentive is to build something that works, not to stretch out the invoice.”
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Proof FSH Works In The Real World
FSH builds software to replace outdated government systems. The pitch is simple. If the software works, agencies buy more of it. If it doesn’t, they don’t. That alignment is already showing up in the numbers.
Once FSH started pushing to expand in Q2 2026, their recurring revenue grew 7 times over. And in about a third of their existing clients, potential business shot up by 1,340%. They’re now aiming for $450 million a year in revenue by 2028.
The traction is also in crisis moments. Pittsburgh Public Schools switched to FSH after their old software company had a security problem that exposed student information. Buffalo made the switch too, after using an old system for years that just couldn’t keep up.
In Philadelphia, a new city tax caught thousands of small businesses off guard. FSH put together a support program in 30 days that helped more than 1,000 businesses file in 13 languages. Speed is the point. The government doesn’t need another 18-month consulting engagement.
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What Comes Next for FSH
FSH is currently operating in Buffalo, Denver, Philadelphia, and Pittsburgh. With the new funding, it’s going nationwide. The product roadmap expands too. Beyond core city and school district systems, FSH is adding EMS and police scheduling, transit management, and case management.
The goal is to replace the patchwork of legacy tools with one platform that works by default. Most of the $25M will go to product, sales, and hiring. FSH plans to 4x its team.
They’re mainly hiring engineers to build the product, designers to make it easier to use, and people to work directly with cities and schools. Investors are betting that govtech needs founders who are willing to do the unglamorous work.
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