A Philadelphia startup that wants to drag government software into the subscription era has closed a $20 million Series A round, betting it can dislodge the hourly consulting firms that have long dominated state and local IT projects.
FSH Technologies announced the funding Tuesday, led by investor Lachy Groom and co-led by Acrew Capital, with Operator Partners, Contrary and Cooley joining the round. The company, which disclosed the raise on August 20 and filed with the SEC on August 21, has now pulled in approximately $24 million since its inception, according to regulatory documents that show 27 investors participated in the latest offering.
The startup sells fixed-price software to cities and school districts, positioning itself as an alternative to the consultants who bill governments by the hour. It's a market dominated by established players like Tyler Technologies and OpenGov, where breaking in requires navigating procurement processes designed to favor the familiar. "Nobody ever got fired for buying IBM," CEO Lilly Chen told Technical.ly in April, describing the challenge facing newcomers trying to win government contracts.
Chen, who engineered machine learning systems at Meta before spending time in a Buddhist monastery, started FSH—which operates under the legal name Contenda, Inc. in SEC filings—with a thesis that governments would pay for software that actually worked. "We're not incentivized to do anything other than provide quality products and services that actually work for local governments and their constituents," she said.
The company's Government Services Platform plugs into the legacy systems that run city and county operations: PeopleSoft, Workday, Tyler's Munis and Eden products. FSH has landed contracts with Philadelphia's Department of Commerce for a free business tax prep program and signed a decade-long, $2 million deal approved by Pittsburgh Public Schools on May 28, 2025 to manage food service for about 22,000 meals daily. The company also counts Buffalo and Denver among its customers, according to press materials, though municipal records confirming those deployments weren't immediately available.
Since activating what it calls an expansion strategy in the second quarter of this year, FSH said its annual recurring revenue jumped sevenfold. Revenue within existing accounts grew by 1,340 percent, the company reported, though it didn't specify the time frame, starting point, or baseline for that metric. The startup is projecting $450 million in ARR by 2028, an ambitious target that would require sustained exponential growth.
Concurrent with the Series A, Jason Chen joined as chief operating officer from Contrary, where he was a partner. The startup's CTO, Rodda John, previously led engineering at Ramp and co-founded Moab. As of August 20, 2026, FSH planned to scale from 11 employees to more than 45 within 12 months, focusing hiring on engineering, deployment and sales roles. The company marked the funding milestone with a ribbon-cutting ceremony on August 21 at its new headquarters on Market Street in Philadelphia.
The market FSH is chasing isn't small. State and local government IT spending is forecast to hit $160.2 billion in 2026, growing somewhere between 4 and 6 percent year-over-year, according to a February analysis by Government Technology. But the sector remains fragmented among entrenched vendors, many of whom appear on the annual GovTech 100 list: Tyler, Accela, Granicus, CentralSquare.
Chen's enthusiasm for the category stands out, perhaps more than she realizes. "We're so gung ho about local government, which is like a weird thing to say, but it's true," she told The Philadelphia Inquirer in July. It's an unusual pitch in an industry where founders typically chase flashier consumer markets, but FSH is wagering that government buyers are ready to pay for software sold like software—not like consulting hours dressed up as technology.
The startup previously raised approximately $5.5 million in convertible notes led by Contrary, with participation from Acrew Capital, General Catalyst, Scribble Ventures and Basis Set Ventures. The SEC filing from August 21 showed $24,095,042 in the current offering.
