PHILADELPHIA, PA
The company is taking its bill-by-results model nationwide, up against the consulting firms and point-solution vendors that have run up the bill on American taxpayers for decades
FSH Technologies, which builds software for cities, school districts and state agencies to replace outdated, slow-moving government IT systems, today announced $25 million in total funding. That includes a $20 million Series A led by Lachy Groom, an early backer of Figma, Notion, Ramp and Lattice, with Acrew Capital co-leading and Operator Partners, Contrary, Cooley and several angels also participating. The round follows an earlier $5 million seed led by Contrary with Acrew Capital, General Catalyst, Scribble Ventures and Basis Set Ventures joining.
“Bill-by-the-hour is why consulting can never lead to government efficiency,” said Lilly Chen, founder and CEO of FSH. “We built the opposite model. We only grow when a city or school district loves our solution and expands the scope, so the incentive is to build something that works, not to stretch out the invoice.”
Chen previously worked as an AI/ML engineer at Meta before advising on Philadelphia’s mayoral transition team, where she saw firsthand how city procurement decisions get made, and who they fail. Before that, she spent time as a Buddhist monk and professional video game player. The company’s name comes from a saying she carried out of that period: be the pond, not the fish — look at the whole picture, not one problem in isolation.
FSH’s model is already replacing the two kinds of vendors that dominate the $160 billion state and local government IT market: consulting firms that bill by the hour, where a slow project is more profitable than a fast one, and point-solution vendors that get bought up by private equity and coast on renewal fees. Pittsburgh Public Schools moved to FSH after a security vulnerability in its previous vendor exposed student data. Buffalo made a similar switch after years on a system that had simply stopped keeping up. When a Philadelphia tax law change left thousands of small businesses suddenly owing a new city tax, FSH stood up a support program in a single month that reached more than 1,000 businesses in 13 languages, most filing for the first time.
“GovTech is a notoriously difficult space because people think bureaucracy is a grind. Lilly and the FSH team obsessively enjoy solving what everyone else thinks is boring. It takes that level of intense optimism to change something that’s always been broken,” said Lachy Groom.
FSH has grown revenue inside more than 30% of its existing accounts, for a 1,340% increase across that group. After activating its expansion strategy in the second quarter of 2026, the company’s own annual recurring revenue grew sevenfold. FSH projects reaching $450 million in annual recurring revenue by 2028. The company is now taking the model nationwide, expanding from its current base in Buffalo, Denver, Philadelphia and Pittsburgh with a goal of operating in all 50 states within the year, adding categories including EMS and police scheduling, transit management and case management along the way.
Lilly Chen is joined by COO Jason Chen, who spent six years as a Partner at Contrary after starting his career at PwC, and CTO Rodda John, who led Ramp’s 20-person engineering team behind billpay.com before co-founding Moab, an ERP startup for equipment rental companies.
The new funding will go toward product development, sales growth, and hiring, taking FSH’s team from 11 to more than 45, primarily in engineering, design and client strategy. FSH’s long-term goal is to make government software work, by default.
About FSH Technologies
FSH Technologies builds software for governments and school districts nationwide, replacing hourly-billed consulting firms and point-solution vendors with a single platform that only grows when the software actually works. FSH currently serves Buffalo, Denver, Philadelphia and Pittsburgh, among other locations, with plans to expand to all 50 states.
Media Contact Details
Outlier Partners | Lauren Wallack-Estes
FSH Technologies
Email: Send Email