Since PUBLIC’s inception in 2017, we have been on a mission to help transform public services with modern technologies and ways of working, with a particular focus on driving collaboration between startups and government. We were an early mover on GovTech - one of the earliest - and have seen some real change in the sector.

By working closely with 300+ mission-driven startups across Europe - optimising patient experience in hospitals, driving energy efficiencies in buildings, and advancing defence capabilities - and by running 30+ open innovation programmes pioneering new procurement approaches, we have witnessed firsthand the transformative potential of integrating GovTech startups into public service delivery.

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In the last few years, the GovTech sector has produced some incredible outcomes. Startups are driving more personalised, cost-effective services in every government sector, with some notable examples of large scale deployment and impact.

Beam’s Magic Notes tool, streamlining administrative tasks for social workers, is being used by over 60 local government bodies. The tool is estimated to save up to £2 billion annually by reducing time spent on note-taking and report filing. 

Similarly, Patchwork Health, a flexible staffing solution for healthcare practitioners, has partnered with over 60 NHS organisations to help them address staff shortages in hospitals. This has helped to achieve significant cost savings and operational improvements, seen in examples such as with Mersey and West Lancashire Teaching Hospitals NHS Trust where Patchwork has helped establish the UK's largest collaborative staff bank, enabling 24 partner trusts to share a pool of 6000 temporary staff. 

Cyacomb, a Scottish scaleup empowering law enforcement to identify child sexual abuse material within seconds (100x faster than traditional methods), has been rolled out across all UK territorial police forces through a collaboration with the Home Office.

When we started, we were confident that success stories of GovTech companies securing large government contracts would push investors to wake up to the potential of the GovTech sector, encouraged by the large addressable market and impact potential. On reflection, this is still a ‘work in progress’, with many GovTech ventures still struggling to secure growth funding, and GovTech still not a fully mainstream venture ‘vertical’. 

But there have been many notable greenshoots. Cera, a digital platform for home care, is estimated to be worth over $1 billion after securing $150m in funding from investors including Kairos Ventures and Yabeo Capital; PolyAI, a human-like voice assistant technology automating customer service interactions in public and private settings, recently secured £40m in Series B funding; and Adarga, a defence intelligence platform able to process huge amounts of open-source data to rapidly identify threats, raised $20m and recently signed an enterprise agreement worth up to £12m with the Ministry of Defence.‍

On the demand side, it’s refreshing to see that every major government team in the UK has established at least one initiative to work more closely with SMEs and startups, with some mature collaboration models emerging.

This has been a big change since we started. In 2017, there were very few public sector open innovation programmes, challenge funds, accelerators for startups, or innovation procurement vehicles. This has certainly changed now. These include a greater use of pre-market engagement and challenge-led procurement, such as: the Local Government Association Innovation Showcase, that engaged 100 council officers and leading startups in co-designing AI use cases for local services; dedicated, national purchasing frameworks creating an innovator-friendly route to market for technology products, such as CommercialX and Spark; and ongoing open innovation initiatives such as Transport for London’s (TfL) Open Innovation Programme. These kinds of startup collaboration models really have gone mainstream.

In 2025, PUBLIC’s core mission to bring more startups closely to public sector problems is more important than ever.

In the same way that startup and government collaboration was at the centre of the Covid-19 response, ongoing macro policy challenges, such as the climate emergency, require the agility, mindset, and transformative innovation powered by the startup sector to be effectively tackled. Additionally, the urge for European competitiveness in AI and advanced technologies, combined with the push for modernising public administrations make this topic more relevant than ever.

The UK is the European leader in GovTech, but while interest in the sector has grown over the last years (especially in defence and health), structural issues persist — including fragmented programmes, unclear front doors and procurement routes, and limited opportunities for scaling.

At the time of writing, the UK government is yet to build a unified, cross-departmental GovTech strategy, with the current landscape of innovation initiatives being run in silos by different departments. The most prominent Government-led effort to date, the GovTech Catalyst Fund - initially launched in 2018 to connect innovative startups directly to government procurement opportunities - is no longer operational due to lack of funding and changing government priorities. As we have said above, this is not strictly a bad thing: we have seen departmental and authority-led models take its place, with greater focus, and a clearer tie-in to real user needs. But we still think that there is potential for a central GovTech or Open Innovation model too, run out of the new Digital Centre.

Despite a sustained push to get more SME spend from public procurement, the data shows there has been limited improvement in the total shareof SMEs receiving procurement spending, with many departments lacking consistent monitoring of their SME spending targets, and suppliers having limited visibility on tender opportunities due to a highly fragmented system. The Procurement Act 2023 - which only recently came into force in February 2025 - is set to change this, introducing a central data platform, greater transparency over public contracts, and more flexibility over the design of innovative tenders. Additionally, as signalled by the Devolution White Paper, the regional level - an ideal test-best for innovation - will gain more autonomy and funding, unlocking more opportunities for collaboration and innovation. But to fully realise the benefits of GovTech, the UK government must go further. We think of ‘innovation’ in the public sector as having two distinct, but inter-related areas of action for government: on the one hand, the government must nurture an environment that enables and rewards experimentation inside of government, and, on the other one, create a path for rapid identification, testing, and scaling of the best solutions from the GovTech market.

Based on this framing and informed by nearly a decade of experience working at the forefront of startup-government collaboration, we’ve laid out 7 practical recommendations for what the UK government can do to catalyse the growth of the GovTech sector and in turn, achieve real outcomes for the services it delivers for citizens. Many of these, we have articulated or endorsed before - but now feels like a good time to re-prioritise them:

Recommendations for Government

1. Create mechanisms that encourage civil servants to operate in a more innovative way.

This can help expose them to agile ways of working that are typical of the startup sector. The UK civil service has initiated a programme of seconding employees from startups with specialised data skills to work on key policy areas within government departments, the Digital Secondment Programme. Similarly, schemes that enable civil servants to immerse themselves in a startup environment - such as the Percy Hobart Fellowship - should be encouraged across all levels of government.

2. Provide more opportunities for policy, technical and commercial teams inside of government to get visibility on innovative solutions.

To enable more diverse supply chains in public services, authorities should gain better visibility over the innovator market, outside the fixed procurement window. Additionally, taking advantage of the agility introduced by the new Competitive Flexible Procedure, more dynamic engagement approaches - such as  roadshows, pitch day style demonstrations, and rapid POC development - should be embedded into formal procurement processes. Our recent guidance on how to practically use the CFP for innovation is a good place to start.

3. Spotlight success stories of startup-government collaboration to ensure that what works can be replicated in other contexts.

Success stories of startup-government collaboration are not systematically collected and widely shared, which limits the opportunities for replication and scaling. A simple way to support the re-using of powerful tools and products would be through a dedicated microsite within GOV.UK or the new central procurement portal used as a central point of case study and knowledge sharing. Centres of Excellence, such as Germany’s Competence Center for Innovative Procurement (KOINNO), are powerful ways to support the systematic sharing of best practices which should be explored.

4. Make greater use of mission-led funding to promote deeper cross-sectoral collaboration.

Building on initiatives such as the Shared Outcomes Fund at the department level, innovation initiatives should be conceived as cross-sectoral by default. At the local level, the upcoming Integrated Settlement introduced by the Devolution White Paper, combining multiple streams of funding for Local Authorities into a single package to deliver an integrated place-based strategy, is a positive step in this direction.

5. Build a local front-door for startups wanting to tackle public problems at local or regional levels.

Cities and regions are uniquely valuable as testbeds for startup-led innovation, and local administrations should build dedicated channels to foster collaboration between innovators and local bodies. For example, the city of Hamburg has established a venture unit GovTechHH, helping startups build solutions that can benefit the city administration. They offer guidance, support and clear procurement routes, including a compliant path to direct award for contracts under 100,000 euros.

6. Integrate procurement pathways into innovation programmes.

Too often innovation programmes are disjointed from government procurement routes, operating as stand-alone initiatives that lead to limited impact after the initial proof of concept. Challenge based models such as CivTech Scotland, matching public-sector problems with startup solutions and offering a compliant route to market, should be replicated in other central and local government settings.

7. Stimulate and de-risk private capital into GovTech through dedicated, public ‘funds-of-funds’.

For GovTech to become a core area of investment for impact funds, a strong signal from the government is required. A government ‘fund-of-funds’, paired with a unified GovTech strategy and stronger commitments towards the growth of the sector, will provide investors with confidence to ingest more patient capital into GovTech ventures.

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We are excited to continue championing GovTech innovation, working closely with the UK and international governments to help fully realise the potential of this sector.

If you have any reactions to this article, think we missed something, or are just keen to chat further about all things startup-government collaboration, don't hesitate to reach out to chiara@public.io.