Shepherding the $2T Government Procurement Market into the E-Commerce Era; Introducing Pavilion (formerly CoProcure)
Forerunner and govtech?
The marriage may not be obvious at first glance, but when the company at hand is transforming the purchase journey for the sector and empowering buyers and sellers to do better business—absolutely.
Technology has fundamentally changed commerce in every sector except for government, which commands almost $2T annual spend–nearly 10% of U.S. GDP–on state and local purchases ranging from traffic cones to landscaping, PPE to playground equipment. While consumers and businesses outside of the government can quickly make informed purchasing decisions online, government agencies are stuck using 1900s technology for their essential purchases, forced to run buying through highly-regulated and highly-manual government processes. The greatest innovation is cooperative purchasing, which saves massive amounts of time by allowing government agencies to piggyback off of one anothers’ contracts. Cooperative purchasing is a growing $190B market now used to some degree by over 90% of state and local governments, but remains far from mainstream, facilitating just 18-20% of local government spending as of 2018.
Enter Pavilion, the only company offering a free search tool for all cooperative contracts across the U.S. Pavilion (formerly known as CoProcure) is looking to build the de facto marketplace for cooperative purchasing as it becomes a larger and larger piece of overall procurement spend. Timing is everything, and it couldn’t be better, with our country on the heels of a landmark infrastructure bill that will put trillions of incremental spending power into the hands of state and local governments. Moreover, Pavilion is catalyzed by changing demographics in government agencies, with digitally native millennials taking leadership roles in procurement with great appetite for, and fluency with, technology. And of course, Covid-19, which has driven greater govtech adoption and cooperative contracts utilization as smaller agency teams have had more work to accomplish than ever, procuring PPE, sanitation services, products for remote schooling, etc.).
Pavilion's solution is resonating with government agencies and suppliers alike. More than 300 government agencies have already been activated on the platform, empowering public servants with access to 50K+ vendor contracts, and Pavilion is influencing well over $100M in annualized GMV with strong buyer retention.
Above all else, Pavilion is a bet on a winning team. The company was founded by Mariel Reed, who epitomizes founder-market fit as a visionary for the sector. An early Coursera employee, Mariel most recently served as a public servant herself, as a Senior Innovation Strategist for the city of San Francisco. While there, she fell in love with procurement and observed a massive opportunity to bring a platform like Pavilion to life. She brought on Co-Founder Alicia Chen, the first female engineer at Dropbox who helped scale the organization from 70 to 2K+ people. The two have done a tremendous job bringing on world-class talent from companies like Palantir, Stripe, Netflix, Affirm, and Facebook, all with shared enthusiasm about scaling a massive technology company that stands to have dramatic social impact.
Big picture, Pavilion aims to reduce the costs of buying and selling in local government, level the playing field for businesses, and achieve better outcomes for communities across the U.S., and we’re honored to have the chance to back this team as they realize this vision of national consequence.
Special thanks to Pavilion's ‘Ali’s’ - Ali Rosenthal of Leadout Capital (Pre-Seed Lead) and Ali Partovi of Neo (Seed Lead) - for bringing us this wonderful opportunity. We’re thrilled to be invested alongside them and others.