Philadelphia-based startup FSH Technologies closed a $20 million Series A led by Lachy Groom, lifting total funding to $25 million to scale its results driven software for cities, schools, and agencies nationwide.
FSH Technologies, a Philadelphia-based startup, has raised a $20 million Series A, bringing its total funding to $25 million. The round was led by Lachy Groom (an early investor in Figma, Notion, Ramp, and Lattice), with Acrew Capital co-leading. Participants included Operator Partners, Contrary, Cooley, and several angel investors. This follows an earlier ~$5 million seed round led by Contrary, with participation from Acrew Capital, General Catalyst, Scribble Ventures, and Basis Set Ventures.
The company builds software for cities, school districts, and state agencies to replace outdated government IT systems. It positions itself against traditional consulting firms (such as Accenture, which it has competed against and beaten in bids) and point solution vendors. Its model emphasizes outcomes over billable hours: growth occurs when clients expand the scope of successful deployments rather than through prolonged consulting engagements. Founder and CEO Lilly Chen has described the traditional “bill by the hour” approach as inherently misaligned with government efficiency.
What is FSH Technologies?
FSH Technologies was founded by Lilly Chen (around 2021, after she left Meta). Chen, now about 30, has an unconventional path: she dropped out of high school at 16, spent roughly two years as a Buddhist monk (including time in a rural Chinese monastery), returned to the U.S., scored a perfect 36 on the ACT, attended Colorado College (where she taught herself to code), and worked as a machine learning infrastructure engineer at Meta. Disillusioned with big tech’s distance from real world impact, she founded the company to address public sector technology. The name draws from a saying associated with her monastic period (“be the pond, not the fish”) emphasizing systemic solutions over isolated problems.
Key team members include COO Jason Chen (formerly a Partner at Contrary and earlier at PwC) and CTO Rodda John (who led engineering at Ramp for billpay.com and co-founded Moab, an ERP startup). The company is woman owned and describes itself as people first, starting with existing government processes and users before building technology.
The addressable market is large: state and local government IT is estimated at around $160 billion. Governments often rely on legacy systems, hourly consultants, or acquired point solutions that generate ongoing renewal fees with limited improvement. FSH targets this with composable, purpose built software focused on municipalities and schools.
Notable traction includes:
- A 10 year, ~$2 million contract with Pittsburgh Public Schools to modernize food service operations supporting about 22,000 meals daily (and millions annually).
- Work with the City of Philadelphia’s Department of Commerce, including a platform for a free small business tax preparation program that reached more than 1,000 businesses in 13 languages within the first month after a tax law change.
- Deployments or clients in Buffalo, Denver, Philadelphia, Pittsburgh, Somerville (MA), Eugene, Poughkeepsie, New York, Houston, and others. Reported broader reach includes projects impacting hundreds of municipalities and millions of citizens.
- Metrics cited: revenue growth inside more than 30% of existing accounts (1,340% increase across that group); sevenfold growth in annual recurring revenue after activating expansion in Q2 2026; average project impact of 57k+ people; software involved in distributing over $15.6M in grant funding.
The company has also worked on areas such as grant management, library donor systems, hiring/onboarding platforms (one claimed to cut onboarding time by 60%), forms automation, and other civic tools.
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Proceeds will support product development, sales growth, and hiring, expanding the team from about 11 employees to more than 45, primarily in engineering, design, and client strategy. Salaries for such roles have been noted in the $150k range plus signing bonuses and equity. The company recently moved into a new Philadelphia headquarters at 2400 Market Street (ribbon-cutting around August 21, 2026) and has a smaller New York presence.
Expansion plans include operating in all 50 states within 12 months, growing primarily by deepening work with existing clients, and adding categories such as transit management. Long term projections include reaching $450 million in annual recurring revenue by 2028. The stated goal is to make government software “work, by default.”
FSH differentiates through aligned incentives (results based expansion rather than hours or locked-in renewals), rapid delivery on complex public sector needs, multilingual and accessible citizen facing tools, and a focus on end to end process improvement rather than isolated point solutions. Investor interest from high profile backers of successful software companies signals confidence in the approach within a historically challenging govtech market, where procurement is slow, risk averse, and often favors established names.
The funding provides runway to scale team, product, and geographic reach while capitalizing on early revenue momentum and client expansion. Success will depend on continued ability to win and expand government contracts against larger incumbents, maintain delivery quality at scale, and convert the reported ARR growth trajectory into sustained national presence.
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