FSH Technologies

The company is taking its bill-by-results model nationwide, up against the consulting firms and point-solution vendors that have run up the bill on American taxpayers for decades FSH Technologies, which builds software for cities, school districts and state agencies to replace outdated, slow-moving government IT systems, today announced $25 million in total funding. That includes a $20 million Series A led by Lachy Groom, an early backer of Figma, Notion, Ramp and Lattice, with Acrew Capital co-leading and Operator Partners, Contrary, Cooley and several angels also participating.

The round follows an earlier $5 million seed led by Contrary with Acrew Capital, General Catalyst, Scribble Ventures and Basis Set Ventures joining. "Bill-by-the-hour is why consulting can never lead to government efficiency," said Lilly Chen, founder and CEO of FSH. "We built the opposite model. We only grow when a city or school district loves our solution and expands the scope, so the incentive is to build something that works, not to stretch out the invoice." Chen previously worked as an AI/ML engineer at Meta before advising on Philadelphia's mayoral transition team, where she saw firsthand how city procurement decisions get made, and who they fail.

Before that, she spent time as a Buddhist monk and professional video game player. The company's name comes from a saying she carried out of that period: be the pond, not the fish - look at the whole picture, not one problem in isolation. FSH's model is already replacing the two kinds of vendors that dominate the $160 billion state and local government IT market: consulting firms that bill by the hour, where a slow project is more profitable than a fast one, and point-solution vendors that get bought up by private equity and coast on renewal fees.

Pittsburgh Public Schools moved to FSH after a security vulnerability in its previous vendor exposed student data. Buffalo made a similar switch after years on a system that had simply stopped keeping up. When a Philadelphia tax law change left thousands of small businesses suddenly owing a new city tax, FSH stood up a support program in a single month that reached more than 1,000 businesses in 13 languages, most filing for the first time. "GovTech is a notoriously difficult space because people think bureaucracy is a grind. Lilly and the FSH team obsessively enjoy solving what everyone else thinks is boring.

It takes that level of intense optimism to change something that's always been broken," said Lachy Groom. FSH has grown revenue inside more than 30% of its existing accounts, for a 1,340% increase across that group. After activating its expansion strategy in the second quarter of 2026, the company's own annual recurring revenue grew sevenfold. FSH projects reaching $450 million in annual recurring revenue by 2028.