When the federal or state government says that it’s obtaining 20,000 surgical face masks or 100,000 nasal swabs to fight the COVID-19 pandemic, those items don’t materialize out of thin air, and the government doesn’t make them itself. Instead, the government puts out a contract, which businesses can bid on to fulfill.
These government contracts can be very lucrative for businesses. Say your company is in the business of manufacturing nasal swabs, and you typically sell a couple hundred of them to nearby hospitals and medical offices. If the government is putting out the request to buy 100 times what your customers usually do in a single contract, that could mean a huge boost in revenue.
But government entities put out a lot of contracts. The federal government alone spent $559 billion on contracts for products and services in 2018. That means businesses and manufacturers have a lot of sifting to do in order to find the right contract to go after. This is where DemandStar comes in.
Seattle-based DemandStar created a marketplace for businesses to bid on government contracts. And on Tuesday, the company announced that it closed a $2 million seed funding round to grow.
DemandStar’s matching algorithms help businesses find the right contracts for them, and then makes it easy to place a bid electronically. The company says it helps both businesses and government agencies streamline the process of fulfilling contracts, and helps governments find a more diverse array of businesses.
“When governments increase competition and bring the best of their local communities to the table, everybody wins,” CEO Ben Vaught said in a statement. “This funding enables us to bring more governments and more businesses into the DemandStar Network.”
DemandStar launched in 2018 when it was rolled out of government business intelligence company Onvia. Since then, the company has added almost 600 government entities and over 100,000 businesses to its network.
