PHILADELPHIA, PA — FSH Technologies has raised $25 million to expand its government software business nationwide, giving the Philadelphia-based company fresh capital to compete for a share of the $160 billion state and local government information technology market.
The financing includes a $20 million Series A led by investor Lachy Groom and co-led by Acrew Capital, with participation from Operator Partners, Contrary, Cooley and individual investors. An earlier $5 million seed round was led by Contrary, with Acrew Capital, General Catalyst, Scribble Ventures and Basis Set Ventures participating.
FSH develops software for cities, school districts and state agencies, positioning its business as an alternative to traditional consulting engagements and standalone government technology products. The company ties its growth to agencies adopting and expanding its software rather than billing clients by the hour.
The new capital will finance product development, sales and hiring as FSH seeks to expand from operations in Philadelphia, Pittsburgh, Buffalo and Denver to all 50 states within a year.
FSH plans to increase its workforce from 11 employees to more than 45, primarily across engineering, design and client strategy. It also intends to move into additional government software categories, including emergency medical services and police scheduling, transit management and case management.
The company reported that annual recurring revenue has increased sevenfold since it activated its expansion strategy in the second quarter of 2026. Among existing accounts where revenue has expanded, FSH reported aggregate growth of 1,340%.
FSH projects reaching $450 million in annual recurring revenue by 2028, an ambitious target as the company attempts to scale beyond its current municipal and school-district customers.
Its customers include Pittsburgh Public Schools, which switched to FSH after a security vulnerability involving its previous vendor exposed student data, according to the company. FSH also reported replacing an older system in Buffalo.
In Philadelphia, the company developed a support program after a change in city tax law resulted in thousands of small businesses facing a new tax obligation. FSH reported launching the program within a month and reaching more than 1,000 businesses in 13 languages.
Founder Lilly Chen previously worked as an artificial intelligence and machine-learning engineer at Meta and later advised Philadelphia’s mayoral transition team, experience that exposed her to municipal procurement and technology operations.
She is joined by Chief Operating Officer Jason Chen, a former partner at Contrary who previously worked at PwC, and Chief Technology Officer Rodda John, who led an engineering team at Ramp before co-founding enterprise software startup Moab.
The financing puts additional capital behind FSH’s effort to displace established government IT vendors as public agencies contend with aging technology systems, procurement constraints and pressure to modernize operations.
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