Software in Focus: The Halo Around GovTech
Insights from Baird’s Private Company Technology & Services Conference
GovTech has emerged as an area of immense investor interest within the broader Software space, and interest has continued to increase. At Baird’s 2025 Private Company Technology & Services Conference, Baird Global Investment Banking hosted a panel discussion that highlighted the multifaceted opportunity in the sector, focused primarily on the State and Local level of GovTech.
Moderated by Jeremy Fiser, Managing Director in Baird’s Software Group, the panel featured a wide range of perspectives from Bill Nunan, CEO – Lexipol; Jeff Corns, CEO – Scheider Geospatial; Jordan Barron and Neil Menzies, both Managing Directors – L.E.K. Consulting; and Will Power, Baird’s Senior Research Analyst covering Cloud Software.
Panel Highlights
Digital Adoption is Still in the Early Stages Across State and Local Government
It’s fairly well known that the government apparatus largely lags the broader corporate landscape in terms of digital adoption. Manual, disparate systems are still common in many local, state and federal systems; in some instances, paper and pen or rudimentary excel based tools are still being utilized. Digital transformation is marching forward, though, as more digital and cloud tools tailored to government organizations enter the market and address specific use cases. Panelists largely agreed that this digital adoption trend will continue to provide a long-term tailwind for the GovTech market. This trend coincides with a time of change at the CIO level across the country, when more “cloud comfortable” CIOs are taking the IT helm of government agencies and are more appreciative of the benefits that GovTech solutions can provide in terms of productivity, efficiency, etc.
All Signs Point to Resilience in GovTech Funding
Despite some lingering macro questions, the panel agreed funding is poised for continued resilience in the years ahead. Even in instances where State and Local government budgets in total are flat to down, spend on digital solutions is increasing as government leaders recognize the value prop and return from making investments in GovTech solutions. U.S. public safety in particular has seen an increase in spending across recent decades to upgrade our systems towards next generation solutions that can allow first responders and public safety professionals to better perform their duties. While there is a possibility some federal funding may begin to dry up, the need for modernization and workflow enhancements to government systems will persist – and in turn, likely drive continued interest and investment in GovTech solutions.
GovTech Tends to be “Sticky” within Agencies
Panelists emphasized how important trust is for GovTech players. Overall, government agencies tend to be risk-averse and resistant to change, with a strong preference to work with known, trusted partners. Companies that can establish themselves as a trusted partner to a government agency will likely gain a highly “sticky” customer – as well as cross-selling opportunities as the relationship unfolds.
Baird’s GovTech Investment Banking Team
Baird’s GovTech team has been one of the most active advisors across the market and covers the full spectrum of levels of government (Federal, State and Local) and the full breadth of capabilities (including public safety and public admin functions). Connect with our team at GovTech@rwbaird.com to further discuss these topics and opportunities in the sector.
