Public contractor-focused Govforce raises $2.5 million

Govforcea compliance tech startup for federal government contractors, raised $2.5 million in seed funding from QED Investors and Humba Ventures, the company tells Axios exclusively.

Why it matters: Government contracts are lucrative, and the US spent $650 billion last year across multiple industries. But contractors struggle with the complex requirements that come with a government contract.

Details: Other investors in the round include Cambrian and NextGen Venture Partners.

What will be next: With seven employees, GovForce is still in testing, and will use new funding to launch in beta next month.

Context: Contractors often face a higher social and operational bar as they are paid with taxpayers’ money.

• For example, contractors and subcontractors must prove they can meet certain cyber security standards, such as targets for international espionage.
• They must also develop proactive plans to hire minorities, women, veterans and people with disabilities, and demonstrate that they have the proper insurance in place.

How it works: Govforce acts as a monitoring platform for small to medium government contractors and subcontractors, ensuring both are up to date on reporting and compliance with the above issues.

• Instead of contractors manually emailing subcontractors for updates, for example, Govforce acts as a checklist – notifying users if a deadline is approaching or insurance is about to expire.
• “There’s no reason why you can’t have a single source of truth for these things,” says CEO and co-founder Tonio DeSorrento.

Of the note: Contractors, rather than the government, are responsible for submitting reports on their subcontractors – who also meet the same strict conditions.

• The requirements also depend on the authority, and often change. Late last year, the Biden administration proposed large contractors disclose greenhouse gas emissions and develop reduction targets.

What we watch: How GovForce can integrate fintech products, given the team’s career experience; DeSorrento comes from SoFi, while Chief Growth Officer Brendon DiBella was CRO for StreetShares.

• GovForce has discussed “how we might be able to use software that helps contractors and subcontractors with compliance as a wedge and then build out into a financial services business,” says QED partner Matt Burton, who sits on the boards of Fairplay and Capchase .