Investors Are Interested In Tech Startups That Help Citizens Improve Their Communities

Civic tech startups, which work to improve government and boost citizen engagement, are on the rise.

A new report from the Knight Foundation shows civic tech startups have grossed more than $430 million in investments since 2011.

Civic tech is loosely defined as an organization at the intersection of technology and civic life. Traffic and navigation app Waze and SeeClickFix, a platform for local citizens to improve their cities, are a few examples of such technologies. $430 million seems quite large for an industry most people might not equate with unfettered success (consider the recent issues with HealthCare.gov), but investors are showing interest.

"Civic leaders and funders are increasingly exploring the potential for technology to promote healthy, vibrant communities," says Jon Sotsky, Knight Foundation director of strategy and assessment, in a press release. "Though activity and investment in civic tech has grown over time, a lack of insights and common terminology for describing the full spectrum of efforts in the space has hindered collaboration around shared strategies for impact. We hope this report will increase understanding about investments in civic tech and help identify opportunities to advance the field."

After charting 177 private capital and foundation investments that went to 102 civic tech organizations (out of the 209 identified), the report found the following:

  • 24% annual growth rate in the launch of civic tech companies since 2008.
  • Prominent investors include: Omidyar Network,the Knight Foundation, Google, and Ashton Kutcher
  • 84% of the civic tech space is dominated by private capital
  • The fastest growth within the industry is peer-to-peer sharing organizations, which grew 36% from 2009 to 2012.
  • Between 2011 and May of 2013, peer-to-peer sharing has attracted close to $240 million.

[Image: Flickr user Vox Efx]

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