Why We Invested: Citymart

Cities are under pressure. They need to adapt faster than ever before in order to cope with the huge demands being placed on them as 65 percent of the world’s population moves to live in our urban centers over the next 35 years. Cities are complex systems with unique challenges that require thoughtful, innovative, and creative solutions.

In the United States, the current systems and processes to identify and solve complex city issues are antiquated and often prevent the most innovative solutions from being adopted. For example, through typical procurement channels, streetlights in major cities are costly to maintain, use too much energy, and are not controlled remotely. Citymart worked with the City and County of San Francisco to find a company that designed “smart lights” that are cheaper, follow commonly-accepted standards, are more environmentally sound, manage urban data, and can be remotely controlled. The process itself changed the entire trajectory of the urban lighting network and city policy in San Francisco, making streets safer through better lighting and providing cost savings across departments.

When local government processes and technologies are inefficient and not effective at dealing with the challenges our cities are facing, it is the citizens that are affected the most. Effective procurement attracts new ideas and companies that offer innovative solutions to urban issues, improving the quality of life for residents. For example, New York City Housing Authority is currently working with Citymart to manage electricity demand and in turn reduce electricity costs for its residents. Energy reduction benefits residents, the environment, and could potentially save the City millions of dollars.

Citymart, based in New York City, has been tackling local government procurement since 2011. Citymart partners with cities to rethink the way in which they procure products and services to free up time for governments to focus on identifying the problems that need to be solved, instead of what things they want to buy. Citymart has proven its approach in over 100 procurements in 50 large and small cities in 25 countries — including New York City, Philadelphia, London, Dublin and Paris.

For cities to become “smart,” there must be a way for innovative ideas and solutions to be procured at scale. Citymart’s online platform provides its users with a collaborative tool to capture ideas, develop solutions, conduct market research, and connect with the most innovative vendors. When better solutions are adopted by government, citizens benefit.

We invested in Citymart because it is tackling one of the core challenges in the civic tech sector: procurement. Disrupting government procurement will have a significant impact on the civic tech field by bringing new technologies and urban innovations into cities, and introducing new ways of working for government staff. Within the Governance & Citizen Engagement (GCE) initiative at Omidyar Network, we make investments, provide support, and pursue learning opportunities to advance enhanced government service delivery and public participation in order to ensure that people receive services they need and can hold government accountable.

Citymart’s online platform is a highly scalable model that brings innovation in procurement to cities across the world. Citymart not only connects cities with the most innovative solutions around the world, it also introduces culture change through an online process and learning tools that fundamentally change how cities address problems.

We’re excited to be seeding a company that has the potential to significantly improve the way government does business, and provides an entry into local government for thousands of SMEs, startups, and social entrepreneurs.