OpenGov CEO Zach Bookman: government software is a $1.8B exit business built on 13 years of painful mistakes
Aug 22, 2025 with Zach Bookman
Key Points
- OpenGov sold to Cox Enterprises for $1.8 billion, the largest private software transaction of 2024, after 13 years building the only credible alternative to Tyler Technologies in government ERP.
- Bookman attributes the long path to founding mistakes: wrong products, hiring errors, and overspending, with near-death funding rounds from 2015 to 2019 that only major backers like Andreessen and Powell Jobs weathered.
- Government software dysfunction stems from procurement rules requiring board approval on $25,000–$50,000 purchases, not bureaucratic incompetence, making the category harder to penetrate than most AI startups now entering it understand.
Summary
Zach Bookman, cofounder and CEO of OpenGov, sold the government software company last year to Cox Enterprises for $1.8 billion, what he describes as the largest private software transaction of 2024 and one of the largest in recent years. Cox, a family-owned conglomerate with over 125 years in operation and several dozen billion in annual revenue, had been building the relationship with OpenGov over three to four years as part of a deliberate pivot away from cable, automotive, and legacy businesses.
The founding thesis dates to the aftermath of the 2008–2009 recession, when three U.S. cities went bankrupt and twelve more were predicted to follow. Bookman and cofounder Joe Lonsdale (also a Palantir cofounder) observed California entering a $100 million accounting modernization contract with Oracle and Accenture that ballooned into a $1 billion deal, while the city of Palo Alto was still running a $10 million SAP ERP system delivered on 20 disks with green-screen interfaces. The market opportunity was clear: state and local government software was badly broken and essentially incumbent-locked.
The company took 13 years to reach exit, and Bookman is candid about the path. He describes building wrong products in the wrong order, hiring mistakes, raising and spending too much capital, and learning enterprise sales on the job. The period from roughly 2015 to 2019 was especially difficult, with the company nearly failing to close funding rounds on multiple occasions. Backers including Marc Andreessen, John Chambers, Laurene Powell Jobs, and Scott Cook stayed in through the lean years, attracted largely by the mission. Andreessen reportedly referred to it as "the little engine that could."
The competitive benchmark Bookman points to is Tyler Technologies, which generates approximately $2 billion in annual revenue from state and local government software, produces over $250–340 million in annual free cash flow, and ranks as one of the ten best-performing stocks of the past 20 years on the S&P 500. That precedent validated the category's economics long before OpenGov reached scale.
On the nature of the market itself, Bookman pushes back on the reflexive critique of government inefficiency. He argues that local administrators are largely professional managers working under regulatory constraints imposed by the public itself, and that procurement rules requiring board approval for purchases above $25,000 to $50,000 would be unworkable in any private company. The real dysfunction, in his framing, is political culture rather than bureaucratic incompetence.
Post-acquisition, Bookman says the company is accelerating and has returned its workforce to the office, which he frames as a meaningful competitive advantage. He is openly dismissive of distributed-work models, suggesting competitors adopt them freely. On the wave of AI-focused startups now eyeing government software, he suggests most are underestimating how long and difficult the category actually is to penetrate.