FSH Technologies Raises $25M To Replace Government IT Systems and Hourly Consulting Firms

FSH Technologies has raised $25 million to replace inefficient government IT systems with a faster, more efficient model. The Philadelphia-based company announced the total funding, which includes a $20 million investment led by Lachy Groom, an early investor in major software companies. Acrew Capital co-led the funding round, with other investors including Operator Partners, Contrary, and Cooley. The new capital will help FSH expand nationwide from its current presence in four cities.

FSH's model aims to eliminate the $160 billion problem of city, state, and school districts spending money on inefficient consulting firms and outdated software companies. Instead, FSH builds software that aligns incentives with the success of the solution. If the software works, agencies continue to purchase additional features; if it doesn't, they don't.

This approach has already shown success, with recurring revenue growing seven times over in Q2 2026 and business potential increasing by 1,340% in one-third of their existing clients.

FSH's traction is evident in crisis moments, such as when Pittsburgh Public Schools switched to their software after a security breach exposed student information. The company also assisted Buffalo and Philadelphia, helping more than 1,000 businesses file taxes in 13 languages within 30 days. The focus is on speed, as governments don't need lengthy consulting engagements.

With the new funding, FSH plans to expand to all 50 states within a year and expand its product roadmap beyond city and school district systems. The company will hire 4x its current team, focusing on engineers, designers, and people to work directly with cities and schools. Investors believe that successful govtech founders must be willing to do the unglamorous work required to build effective solutions.