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Dcode nabs $45 million DOD contract, aims to double revenue

June 28, 2022 / Dcode

Note: this article was originally published at DCInno

D.C. tech accelerator Dcode is counting on a major government contract to turbocharge its growth.

The firm recently won a $45 million contract from the Department of Defense to provide tech advisory services, executive coaching and workforce training to any branch of the military, all with a goal of helping the federal government’s largest agency modernize its technology and streamline processes.

The contract is the largest ever for the 7-year-old Dcode and is expected to spur a wave of hiring across the organization, which provides services to both the government and private-sector firms that work with government agencies. The company did not provide sales figures but says that it expects its 2022 revenue to more than double last year’s total.

Megan Vorland, co-founder and chief strategy officer at Dcode, said that the Air Force sponsored the contract within the Defense Department, but that the Army, Navy and other branches are also eligible to tap Dcode’s suite of advisory and technical service, under terms of the contract.

Beyond that, Dcode also aims to play a larger role in connecting the private sector with government agencies, said Vorland, a former senior advisor at the U.S. Small Business Administration.

One of Dcode’s main lines of business is teaching technology companies to navigate the complex world of government contracts. Alumni of its tech accelerator programs include Rockville’s Sepio Systems, D.C.’s Virtru, D.C.’s Mapbox and Arlington’s Distil Networks. It also works to help government agencies innovate and improve their tech operations by connecting them with upstart tech firms.

In the first months of the pandemic, the firm also launched Dcode Capital, a venture capital arm that has so far made more than half a dozen investments in companies that have participated in its accelerators. Most recently it’s invested in Tamr — a company that makes tools to help companies clean and use data — and participated in a $25 million Series B funding round for Berkeley, California’s UrbanFootprint, a data and intelligence company that helps governments, real estate companies and other organizations make informed decisions about environmentally friendly urban planning.

In both cases, Dcode had been working with the companies for a year or more, said Rebecca Gevalt, partner at Dcode Capital. “We had been working with [Tamr] for 5 years,” said Gevalt, adding, “it’s not normal for a VC to work with a company that long.”

Going forward, the group will continue to primarily — but not exclusively — invest in companies that have come through its accelerators, said Gevalt, who is a former analyst with the Central Intelligence Agency.

Dcode Capital also appears to be raising $50 million for a new venture capital fund, according to a document filed this year with the Securities and Exchange Commission. The company declined to comment about the filing, not uncommon since firms are often in a quiet period when in the process of raising funds.

In the past, the venture arm has made just a two or three investments per year on average, but that will probably increase to about four or five deals per year soon, due in part to the declining valuations of early-stage companies. “With the market where it is right now, we think we’re in a really interesting spot,” Gevalt said.

With around 30 employees today, the firm — which has been profitable since its start — plans to increase headcount by around 25% by the end of the year. “We’re always looking for people who understand tech companies but know the bureaucracy of government enough to be great advisors,” said Meagan Metzger, founder and CEO of Dcode. “But we don’t think of it in terms of headcount. We’ve successfully grown our revenue every year. This [year] will be no different.”