The Emergence of Civic Tech: Investments in a Growing Field

December 2013 2 About

At Knight Foundation, we strive to Knight embarked on an analysis earlier support informed and engaged this year to examine clusters of inno- communities. With the proliferation of vation and investment within the field technology in everyday life over the of civic tech. Rather than performing a past decade, Knight has increasingly run-of-the-mill landscape review with funded new technologies designed to stakeholder interviews, we decided to improve the health and vitality of experiment with a new set of research cities. Since 2010, Knight has invested tools. We partnered with Quid, a firm more than $25 million in such that specializes in data analytics and projects, ranging from government network analysis, to map the field of data access platforms to new tools for civic tech through semantic analysis community planning to online neigh- and private and philanthropic Authors borhood forums. investment data. Mayur Patel VP/Strategy and Assessment Over the past two years, we’ve This report summarizes key findings Knight Foundation witnessed through our work a and implications from the analysis. groundswell of interest at the nexus of We hope this experiment will be Jon Sotsky technology, civic innovation, open valuable to those interested in the Director/Strategy and Assessment government and resident field of civic tech as well as organiza- Knight Foundation engagement. Though the terminology tions looking to advance the use of may vary, more and more funders, big data in the social sector. This study Sean Gourley investors and practitioners have joined is a first foray into analyzing the civic Co-founder & CTO this emerging “civic tech” field. We tech landscape but is certainly not an Quid began to wonder: How can practi- exhaustive analysis. We look forward tioners supporting civic tech form to continued partnerships with others Daniel Houghton stronger connections, and how can to advance learning and practice in Engagement Manager we gather better insights into the this field. Quid trends in the field? 3 Contents

overview Objectives & Approach

mapping the field Themes & Trends

innovation clusters Investment Activity & Distribution

investor analysis Funding Sources & Types of Capital

takeaways Strategic Implications & Next Steps 4

This section examines:

objectives What are the main questions explored in the study? Overview definition What is “civic tech”?

scope What types of organizations and investment are included in the analysis? 5 ADDITIONAL RESOURCES

Further analyze the data gathered KeyObjectives implications through the review using these tools: Civic Tech Visualized Interactive website to explore the landscape of civic tech organizations

The analysis was designed to Explore address the following questions:

Civic Tech Directory Index of organizations, investors and investment data how much money • is being invested Download in civic tech projects?

• What are the different clusters of civic tech innovation?

• How does investment vary across these clusters of innovation?

• Which organizations are attracting the most investment?

• who is investing in civic tech?

• What is the balance of private and philanthropic investment? 6 Civic Tech: A Convergence of Fields

collaborative This review incorporates tech consumption companies and projects from sev- Tools for procuring eral fields of work. Only projects paid services from local vendors primarily focused on promoting and sharing of government corporate-owned civic outcomes were included. assets data Peer-to-peer sharing of resident-owned Internal goods and performance services and analytics software Public data access and transparency

crowd Funding for funding projects civic that enhance public tech services and Funding spaces for consumer and commercial Social products causes, civic engagement community Place-based organizing networks and community Political forums campaign management tools Virtual, professional or practice- based networks

social networks 7 Criteria for Inclusion

This study focuses on orga- • Organizations nizations, including for-profit Startups, private companies and nonprofits are included. companies and nonprofits, Events, loose affiliations and networks that are not legally that received funding between registered entities are excluded. January 2011 and May 20131 to develop or scale civic • Time Frame technology. Organizations that received funding between January 2011 and May 2013 are included. Organizations that received funding The review used a set of prior to January 1, 2011, are largely excluded. guidelines to determine which • Investment projects should be included. Grants and investments made by foundations, corporations and The resulting analysis provides private investors are included. Government and public funding for a useful initial assessment, civic tech is excluded. In addition, an organization must receive albeit not an exhaustive exam- funding from a third party, rather than just being financed through ination, of the emerging field an organiza-tion’s internal budget. of civic tech.

• Technology

Organizations funded to support advocacy, research, events and

other purposes related to civic tech but not directly tied to building

tech-related projects are excluded.

• Geography The study concentrates on U.S. investments in U.S.-based civic tech projects. Some international companies that achieved significant investment and/or press also included.

1 The analysis captures organizations that received funding during this period; some have subse- quently closed operations or been acquired. Quid’s investment database captures funding dating back to Jan. 1, 2011. While the review captured a handful of projects that received funding prior to this date, those data are not as comprehensive as data analyzed from this point forward. 8

This section examines:

approach How was the civic tech landscape mapped?

Mapping clusters What are different the Field innovation clusters in the field?

trends How has the field grown over time? 9 READING THE MAP

• Each node (circle) represents Approach to Mapping an organization • Connections between nodes (lines) form between organizations with similar functionality and/or purpose—thicker Civic Technology connections mean greater similarity

• Nodes of similar companies cluster The following steps were used to together; nodes of dissimilar companies repel each other and map the civic tech landscape: create spacing in the map

1 Quid and Knight, in consultation with others in the field, seeded the analysis with a set of organizations viewed as core to civic tech innovation. 2 Key terms (e.g., “civic,” “open government,” “open data”) were used to examine media, press and investment data to generate additional organizations to include in the landscape. 3 Quid’s proprietary software generated a network map based on the level of similarity between the way organizations described the functionality and purpose of their technology. 4 Quid and Knight reviewed the resulting map and determined descriptors for different clusters of organizations that emerged from the analysis.

Civic Tech Network by Quid Landscape Map 10 READING THE MAP

• Circle size represents the number Landscape Themes: of organizations in each cluster • Line thickness represents the number of connections between Open Government & organizations in each cluster • open government Community Action • community action

In reviewing the network map, two top-level themes were identified in relation to the organizations included in the analysis. The network map was then color-coded to highlight these two themes.

Open Government Projects focused on advancing government transparency, access- ibility of government data and services, and civic involvement in democratic processes

Community Action Projects catalyzing peer- to-peer information sharing, civic crowdfunding and collaboration to address civic issues

Network by Quid 11 READING THE MAP

• Circle size represents the number Innovation Clusters of organizations in the cluster • Line thickness represents the number of connections between organizations in each cluster

open government Within the two overarching themes, • • community action 11 clusters of civic tech innovation were identified:

Open Government

1 Data Access & Transparency 2 Data Utility 1 5 3 Public Decision Making 9 4 Resident Feedback 4 2 5 Visualization & Mapping 6 Voting

10 Community Action 11 7 Civic Crowdfunding 7 3 8 Community Organizing 8 9 Information Crowdsourcing 10 Neighborhood Forums 11 Peer-to-Peer Sharing

Network by Quid 12 Open Government Innovation Clusters

cluster example organizations description

Data Access & Promote government data availability, Transparency transparency and accountability

Data Utility Empower users to analyze government data and leverage data to improve public service delivery

Public Decision Encourage resident participation in Making large-scale deliberative democracy and community planning efforts

Resident Feedback Provide residents with opportunities to interact with government officials and give feedback about public service delivery

Visualization & Enable users to make sense of and gain Mapping actionable insight from civic data sources, specifically through the visualization and mapping of that information

Voting Support voter participation and fair election processes 13 Community Action Innovation Clusters

cluster example organizations description

Civic Crowdfunding Suport local projects and organizations that generate a public benefit through peer-to-peer lending and crowdfunding

Community Manage social campaigns and initiatives Organizing

Information Collect data from a large number Crowdsourcing of individuals to inform and address civic issues

Neighborhood Power local groups of people Forums to connect, share information and collaborate

Peer-to-Peer (P2P) Promote resident-driven sharing of Sharing goods and services 14 Growth of Civic Tech

The analysis of civic tech 2012 organizations launched each 121 companies year since 2000 reveals consistent, high growth rates in the field. From 2008 to 2012, the field of civic tech grew at an annual rate of 23%.

2008 83 companies

2000 16 civic tech companies 2004 founded 34 companies

2000–2004 2004–2008 2008–2012 21% 25% 23% compound annual cagr cagr growth rate (cagr) 15 READING THE CHART Growth Trends by Cluster • open government • community action

43 Peer-to-Peer Sharing Organizations Growth has varied across innovation clusters within civic tech, with 40 Community Action clusters growing at a faster rate than those in Open Government. The fastest growth has been among organizations focused 32 Community Organizing on Peer-to-Peer Sharing (36% annually from 2009 to 2012). 30

20 18 Resident Feedback 16 Public Decision Making 16 Data Access & Transparency 15 Neighborhood Forums 14 Visualization & Mapping 12 Information Crowdsourcing 11 Data Utility 10 organizations 8 Voting 7 Civic Crowdfunding

2000 2005 2010 2012

Cumulative growth (in number of organizations) 16

This section examines:

total investment How much money has been invested in civic tech projects?

funding distribution Innovation How has investment varied across different themes Clusters and innovation clusters in the landscape?

cluster characteristics What are the primary characteristics of the organizations in each innovation cluster? 17 Total Investment Summary

209 102 civic tech projects of the 209 identified in the organizations received civic tech landscape investment from Jan 2011 to May 2013

$431M 237 177 invested in different investors investments made these civic tech provided funding in civic tech organizations to civic tech organizations1 organizations

1 Instances where multiple investors participated in the same funding round are counted as a single investment 18 READING THE CHART Funding Distribution • open government • community action

Number1 of Amount of Investments Investment ($) The analysis reviewed the 20 40 100M 200M number of investments and amount invested in each Resident 20 $16M innovation cluster from Feedback January 2011 to May 2013. Data 18 $15M Utility Peer-to-Peer Sharing attracted the vast majority of total Data Access & 15 $37M investment in the landscape Transparency (close to $240M), followed Public Decision by three clusters that each 10 $600K Making received close to $40M: Neighborhood Forums, Com- Visualization & munity Organizing and Mapping 8 $3M Information Crowdsourcing. Voting 8 $4M

Peer-to-Peer Sharing2 42 $234M

Community 29 Organizing $38M

Information 14 Crowdsourcing $35M

Neighborhood 7 $41M 1 Includes grants and private investments Forums from 1 Jan 2011 to 31 May 2013 Civic 2 Peer-to-Peer Sharing includes a $119M 6 $8M round for Airbnb Crowdfunding 19 READING THE CHART • Circle size • open government represents • community action Innovation Cluster Maturity the number of organizations in each cluster

The analysis examined the 50 median age of organizations investments in each civic tech cluster.

Compared to the tech P2P Sharing industry as a whole, civic tech organizations are 40 relatively young. Civic Crowd- funding projects have a median age of just two years, while the average age of organizations in the most 30 Community Organizing mature clusters—Voting, Public Decision Making and Visualization & Mapping— was five to seven years. 20 Data Utility Resident Feedback Data Access & Transparency Information Crowdsourcing

Public Decision Making 10 Visualization & Voting Neighborhood Mapping Civic Forums Crowdfunding

1 2 3 4 5 6 7 Median Company Age 20 READING THE CHART Investment Concentration • open government • community action within Clusters Investment Inequality 1 Highest Funded The analysis examined the distribution Organizations of investments within each cluster to highlight emerging market leaders and Information .77 competitive dynamics at play in each Crowdsourcing $30.0M area. The diagram ranks the “investment P2P Sharing .76 inequality” of clusters by measuring $118.6M the extent to which a handful of organi- Neighborhood .75 zations have secured a dominant share of Forums $40.2M capital to the cluster. Data Utility .74 $9.8M Neighborhood Forums is an example of Data Access & .73 a civic tech cluster with a high level Transparency $16.5M of investment inequality where a single Community firm has received the overwhelming .72 Organizing $15.0M share of investment (Nextdoor = $40.2M). Visualization & .70 Mapping $2.0M Information Crowdsourcing and Peer- Resident to-Peer Sharing clusters have the most .67 Feedback $6.5M unequal levels of investment, but Civic dominant firms in both areas are highly .66 focused on particular issue verticals Crowdfunding $8.0M (e.g., Waze = transportation data, Airbnb = Public Decision .44 housing). Making $0.3M

Voting .42 $1.7M 1 Investment inequality is based on the Gini coefficient, which measures on a 0–1 scale the evenness of funding distribution across organizations within each cluster (0.0 = perfectly even distribution, 1.0 = single firm 0 .1 .2 .3 .4 .5 .6 .7 received entire share of funding) 21 READING THE CHART • Circle size • open government represents • community action Cluster Characteristics the number of organizations in each cluster

Cluster investment inequality can Information Crowdsourcing be cross-analyzed with median .8 investment size by cluster to help Data Utility determine the competitive P2P Sharing dynamics and impressionability Community Organizing of each cluster. Neighborhood Visualization & Mapping Forums “Emerging” clusters of innovation have lower investment inequality Data Access & Transparency and contain organizations that Civic Crowdfunding Resident attract smaller average investments— Feedback these include Public Decision maturing developed Making, Civic Crowdfunding and Voting. Median Investment Amount $15k $150k $1.5 million “Developed” clusters have a high (log scale) level of investment inequality emerging static (i.e., market leaders attracting the bulk of investment) and higher average investments—these include Public Decision Peer-to-Peer Sharing and Neigh- Making borhood Forums.

Voting

.3 Investment Inequality (Gini coefficient) 22

This section examines:

types of capital What is the balance between private and philanthropic capital supporting civic tech? Investor

investors Analysis Who is investing in civic tech?

investor networks How are civic tech investors connected? 23 Types of Capital

The analysis examined the balance of private and philanthropic investment attracted by civic tech organizations from January 2011 to May 2013. 177 $431M Total Total Investment Investments Dollars While the number of grant investments and private investments was relatively even, the vast majority of total capital supporting civic tech came Private from private investments (84%). Investments 76

$364M

Grants 101

$67M 24 READING THE CHART Capital Mix by Cluster • open government • community action

Number of Amount of Investments Investment ($) The mix of philanthropic funding 20 40 100M 200M and private investment from January 2011 to May 2013 varied Data 100% grants 100% grants greatly between the two themes. Utility

Resident Open Government innovation 6% Feedback 72% clusters including Data Utility, Data Access & Transparency, and Data Access & 73% 91% Resident Feedback are mostly Transparency supported through grant funding. Public Decision 90% 98% Making Community Action clusters including Peer-to-Peer Sharing, Visualization & Neighborhood Forums, Civic Mapping 75% 33% Crowdfunding and Information Crowdsourcing mostly Voting 75% 44% attracted private capital.

P2P Sharing 7% 1%

Community Organizing 59% 15%

Information Crowdsourcing 79% 14%

Neighborhood Forums 29% 2%

Civic Crowdfunding 50% 3% 25 ADDITIONAL RESOURCES

Civic Tech Directory Civic Tech Investors Index of organizations, investors and investment data

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Four types of investors are involved in supporting Top Financial investors Top Foundation2 investors civic tech projects— (84 total) (32 total) foundations, financial Omidyar Network1 16 investments Knight 39 43 investors, corporate SV Angel 7 MacArthur 6 investors and individual Start Fund 5 Hewlett (often angel) investors. Y Combinator 4 Rockefeller 5

Investor types and investment count of Lerer Media Ventures Points of Light 4 most frequent investors are based on data from January 2011 to May 2013 General Catalyst Open Society

1 Omidyar Network is designated as a Benchmark Capital Code for America 3 financial investor but operates as a Andreessen Horowitz Ford philanthropic investment firm that also 2 provides grant funding Kauffman

2 Foundation investors may have contributed Gates multiple types of investments—grant funding, program-related and mission- related investments Top Corporate investors Top Individual investors Code for America and Points of Light are (21 total) (101 total) included in this list stemming from funding Google Ashton Kutcher they provide through their civic accelerators 6 investments 3 investments Dell 2 Sean Parker 2 Zipcar 1 Guy Oseary SXSW Esther Dyson

Obvious Aviv (Vivi) Nevo

Nelnet Alexis Ohanian

Daimler Peter Thiel 1 BMW Marissa Mayer

Bennett Coleman Jeff Bezos

Comcast 26

Community Investor Analysis Action

Financial investors and individuals support a large share of Community Action investments. Foundations account for 96 more than half of the number of investments in Open Government.

Open Government 10

Individual investors 9

Foundations 55

113

Corporate 10

Financial 31

Count Of Investments By Investor Type 27 READING THE MAP

• Each circle represents Investor Networks a distinct investor • Investors share a connection when they have both co-invested in the same company

• A larger circle indicates that the investor The analysis reviewed funder has co-invested frequently with others relationships based on instances where they co- invested in the same civic tech organizations. Venture capital and angel investors are at the individual center of the network map, signaling they most frequently co-invest with others. Foundations are largely peripheral financial to the investor network, Y Combinator rarely co-investing with other types of investors. SV Angel

Rockefeller Foundation

Ashton Kutcher Knight Crunchfund

Aviv (Vivi) Nevo Omidyar

foundation General Catalyst

Google corporate

Network by Quid 28

This section examines:

strategic implications How might foundations continue to influence Key the growth of civic tech?

Takeaways next steps How can civic tech funders and practitioners build on the insights from this initial analysis? 29 KeyStrategic implications Implications

Findings from this initial analysis of civic tech funding raise important 1 3 questions about oppor- How can Open Government How can philanthropy exert tunities and approaches attract greater private capital? influence beyond its investments? for investors, particularly Though the number of philanthropic Philanthropy can shape the civic grants far outpaces private capital tech field in ways besides directly foundations, to advance investments (65 vs. 14), private capital investing in organizations, especially this emerging field. constitutes $21M of $75M invested in clusters where significant in open government. Examining the private investment already exists. characteristics of open government For example, foundations may organizations attracting private invest- achieve greater impact advancing ment might help illuminate the the growth of peer-to-peer viability of market-based initiatives sharing economies by addressing in this space and be used to attract outdated regulations inhibiting more private capital. the growth of this sector rather than supplying limited amounts of grant funding to a handful of tech 2 organizations in the space. How can philanthropy support new “Tools for Democracy”? 4 Innovation clusters focused on civic How can funders increase co- engagement and democratic participation— Public Decision Making, Resident Feed- investment and collaboration? back and Voting—are among the youngest Relatively little co-investment currently and least funded areas in the overall occurs in the civic tech field, especially landscape. At the same time, they appear between philanthropic institutions and most ripe to be influenced through other types of investors. As more foun- further support based on the small average dations pursue impact investing strate- investment size and lack of a dominant gies, philanthropic funders could seek out market leader in each cluster. more opportunities to co-invest and partner with other types of investors. 30 KeyNext implications Steps

This initial review was designed demonstrates a growing level of to provide a clearer picture of overall investment and activity in civic tech. investment flows in civic tech, including the distribution of invest- This report summarizes findings from ments across different clusters the analysis. Additionally, two related of innovation and variances between resources exist for those interested in private and philanthropic support. exploring the underlying data about While the boundaries of civic tech civic tech organizations and investors. remain loosely defined, the analysis

Interactive data Data directory of visualization tool to organizations and investors explore the data captured in the analysis

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Share Feedback and Suggestions Help improve the analysis and build Do you have any feedback? a more robust data set of civic tech Share your suggestions organizations and investments. We will with Jon Sotsky at the Knight update the report in 2014 and welcome Foundation. your recommendations for other organizations to include in the data.