Restoring People’s Faith in Local Government: Our Seed Investment in Kaizen

Silicon Valley entrepreneurs have largely avoided building businesses that sell into the government because of their complex and ponderous procurement processes. As a result, federal, state, and municipal agencies are typically relegated to legacy and often mediocre software built by companies who primarily excel at successfully navigating this Rube Goldbergian maze and not technological innovation. Citizens are left lacking modern, consumer-friendly, collaborative software that has gained mass adoption in commercial sectors. Administrators are left with software that is poorly equipped to manage the billions of interactions with local citizens they deal with on an annual basis.

Nikhil Reddy and I have known each other for almost a decade now, first meeting as part of our Accel Scholars program. Through the program, we’ve formed unique, long-term relationships with some of the best talent coming out of UC Berkeley. Nikhil, part of our very first cohort, is the embodiment of this; his combination of technical acumen and personal charisma has always made him a future star in my eyes and someone that we would want to work with. Nikhil’s first experience was at Anduril, where he saw firsthand the impact a talented group of operators can make in traditionally bureaucratic sectors. When working there and living in LA, he had a botched experience with a local park and rec booking, and was subsequently flummoxed by the low quality of the software and how much the city of LA was paying for it. He knew he could do better.

Nikhil called me and described his vision for Kaizen, a modern software platform, building first for parks and rec departments with an intention to spread horizontally across departments to touch all citizen digital experiences. He wanted to give high-volume, rote transactions like obtaining a fishing license or paying a utility bill the e-commerce treatment. For a user, it feels like Airbnb: straightforward, pleasant to use, and built for the way people actually book and pay. For an administrator, it works like Shopify, making it simple to create offerings and process payments. We quickly led the pre-seed round and rode shotgun as Nikhil paired up with co-founder KJ Shah, who previously was chief of staff and head of finance at Flockjay. Joining them was a stellar early team from a mix of government-focused and Valley tech businesses alike: Palantir, Opengov, Granicus, Gusto, X, and Stytch.

Early returns have been very promising. Nikhil and the team’s enthusiasm has struck a chord and found willing adopters and buyers among public agencies. Already serving jurisdictions that encompass more than 30 million residents, Kaizen’s customer base has expanded tenfold since early 2024. Most recently, Kaizen announced partnerships with Maricopa County, AZ; San Bernardino County, CA; Pinellas County, FL; and the Cherokee Nation, America’s largest tribal organization. Earlier this year, we landed our first state contract, managing reservations for a portion of Maryland’s state park system, a sign of things to come. Importantly, introducing modern payment workflows (mobile checkout, Apple Pay, tap to pay, etc) has yielded increased engagement, conversion, and revenue inflow for the local municipalities and states we have partnered with. With the early proof points and momentum, we think there is an opportunity to build a new, next-gen prime serving this broader citizen-facing use case across a host of agencies and services.

After their pre-seed, we also co-led their seed in 2023 alongside A16z’s Katherine Boyle. Today we’re excited to announce Kaizen’s Series A led by NEA and Alexis Ohanian of Seven Seven Six, and which we’re participating in. Forbes has more to say about the round here. Kaizen joins a growing set of ambitious companies that see a better future for American civic institutions. By empowering government agencies with beautiful, functional interfaces, Kaizen doesn’t just make it easier to reserve a campsite or renew a driver’s license, they also increase the trust, goodwill, and civic pride that power America’s long-term success. As we approach the 250th anniversary of this great country, we are proud to play our part in this mission.