The Founders of Govradar.
(Photo: Govradar)
Munich Public sector procurement is expensive, complicated and lengthy. “Regardless of whether it’s air filters and laptops for schools or armaments: the money is often there, but the expertise to procure it in compliance with public procurement law is lacking,” says Sascha Soyk. With his start-up Govradar, the founder wants to create a platform that authorities can use to create tenders in accordance with public procurement law with just a few clicks in order to buy goods and services.
Govradar has now found prominent financiers in an early seed financing round. The investors include former Linde supervisory board chairman Wolfgang Reitzle, former Federal Defense Minister Karl-Theodor zu Guttenberg, former Roland Berger boss Burkhard Schwenker and Finanzcheck founders Andreas Kupke and Moritz Thiele.
The potential market is large. In 2022 alone, the procurement office of the Federal Ministry of the Interior, the central supplier for public administration in Germany, awarded orders worth more than 5.2 billion euros. Three quarters of this went to IT services and technology. According to the German Association of Towns and Municipalities, the market volume of all public contracts in Germany is estimated at more than 300 billion euros.
Purchasing requirements have increased
“We are responsible for a significant part of the economic performance in public procurement,” says Michael Eßig, economics professor with a focus on procurement at the University of the Federal Armed Forces. Purchasing requirements have continued to increase in recent years, for example because the CO2 effects have to be taken into account. “But we don’t always have the strategic buyers who can implement this,” says Eßig. In Germany alone there are 30,000 contracting authorities – from large ministries to small local governments. “We can only achieve professionalization in procurement if we automate routine activities.”
Govradar founder Soyk, who used to work for the controversial US data service provider Palantir, knows the procurement problems from several sides. The reserve officer helped set up the Bundeswehr’s “Cyber Innovation Hub” and used to work at Roland Berger. “Often there is no innovation problem, but an implementation problem,” he says. The right ideas are there, but new concepts are not easy to implement in cumbersome authorities.
Govradar wants to organize public procurement like an online shop
The Govradar platform works in a similar way to an online shop: Public buyers can precisely define the goods they need – from office chairs and company cars to services – using filters and performance features. Often there is only a small number of bidders for a tender, says Eßig. “By making small changes in the description of services, you can often significantly increase the number of bidders.” The automation of descriptions of services can help.
The platform aims to make procurement in the public sector as easy as private online shopping.
(Photo: Govradar)
With the Govradar solution, a product database is then queried in the background, which, according to the company, works in accordance with procurement law and is neutral in terms of the principle of equal treatment in the public sector. From thousands of laptop models, those that match the tender are then selected. For example, IT products, vehicles and furniture are currently covered. However, it must be guaranteed, says university professor Eßig, that individual bidders who pay a higher commission are not given preference.
Govradar has several dozen competitors – platforms that specialize primarily in procurement processes. “But we want to become the leading platform for the public sector in Europe,” says Soyk. The aim is double-digit million sales in 2026. If you get your way, three-digit million sales are possible in the long term.
The company names the Federal Ministry of the Interior (BMI) and cities such as Duisburg, Ulm and Magdeburg as reference customers. The cooperation with the BMI, for which the software generates contract templates, is a great success, says Soyk: “In the procurement scene, this is the flagship.” The customer base is still limited to 70 authorities, schools and institutions, with the proceeds from With the financing round, Govradar now wants to win more customers. The company also plans to connect bidders to the platform in the future.
Reitzle has been investing in start-ups for years
The Bay-Start-up investor network prepared the seed round, which raised one million euros. Young companies could also benefit from the technology, said Bay start-up managing director Carsten Rudolph. The federal government’s strategy provides for better access for start-ups to public contracts: “Govradar creates an important basis here with its software platform.”
Ex-Linde and BMW boss Wolfgang Reitzle is also investing in Govradar. “The Govradar founders introduced me to the topic immediately after the start of the Russian war of aggression against Ukraine,” says Reitzle. There is a great need for action in defense procurement, but also in other areas such as the health authorities, as was seen in the corona pandemic.
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