Former Harrisburg Official Raises $ 10 Million for ‘Yelp for Government’ Review Service

Former Pennsylvania purchasing manager raised $ 10 million in venture capital to expand Procurated, his online government vendor review platform, which asks staff at state and local agencies to rate the services they purchase with private entrepreneurs.

“It’s very easy for a supplier with a poor track record” to hide behind some glowing testimonials, said David Yarkin, who has spent the 15 years since leaving the Rendell administration starting and running his business. Washington consulting firm, Government Sourcing Solutions.

The purchases “expose all the negative experiences” that governments may have had at the hands of an entrepreneur, Yarkin added. “So you can make a choice with your eyes open. “

On Procurated, “Our buyers can learn about suppliers, not just from their peers in Pennsylvania, but from across the country,” said Curt Topper, secretary of the Pennsylvania Department of General Services, which oversees construction projects. of the State and was the first user of Procurated.

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Procurated provides a “secure platform on which employees can feel comfortable responding and providing advice,” said Jaime C. Schorr, the lawyer and MBA who heads the Maine purchasing office. She is also the new president of the National Association of Public Procurement Officials. Massachusetts started using the service last year, said Gary Lambert, assistant secretary of state for operational services.

States and cities use the basic service free of charge; entrepreneurs fund it by buying ads, which Yarkin says doesn’t affect ratings. The name is pronounced “PRO-cyoo-rated”.

The new funding – which will be used to hire sales, service and engineering staff – was led by New York-based Greycroft, led by veteran tech investor Alan Patricof, along with Tribeca Venture Partners, TDF Ventures based in Maryland and Limerick from Chicago. Hill LLC, which has led previous fundraising rounds totaling $ 5 million since Procurated’s inception two years ago.

Why is such a service even useful, in a presumably competitive economy where governments are bound by years of hiring rules meant to attract high-quality, efficient candidates?

It’s a sign of “market failure,” where local and state government buyers can’t always afford good information about these candidates, Yarkin said.

“The purchasing agents are overworked, underpaid, they don’t have the time or the means to do all the research,” he said, acknowledging that these complaints do not elicit much sympathy from the community. share of taxpayers.

Yarkin felt that the internet should make it as easy to verify entrepreneurs with their customers as, for example, Yelp makes it easy to verify restaurants with customers: and Passyunk than I could of a supplier to which the Commonwealth will pay. $ 10 million per year.

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With 25 employees working mostly remotely – including Harrisburg-based Senior Director of Community Engagement, Ellen Sigl, formerly at CAI and LingaTech, Pennsylvania state software contractors – Procurated solicited and collected 10,000 reviews entrepreneurs in Pennsylvania and six other states.

Granted, even without sophisticated rating systems, purchasing managers naturally call each other across the country to share information on pricing and past performance, noted Schorr of Maine. But “Procurated offers an automated tool” to focus and speed up research.

His office used the service “to confirm the opinions of technology providers who are already contractually engaged with another state”, and followed up with agents who signed their proxy notices on their own behalf, which is voluntary. . She said she gave the “friendly” platform its own “five star” rating.

Yarkin said that contractors’ payments for listings do not affect reviews, ratings, and rankings.

But isn’t Procurated vulnerable to the same kind of insider praise or competitor whistleblowing that has plagued consumer services like Yelp?

Not so much, as Procurated restricts the service to people in charge of purchasing, Yarkin said. And the more reviews the platform collects, the harder it is for an entrepreneur to corrupt the process: “Our goal is to become ubiquitous, as widely used as Dun & Bradstreet is to assess creditworthiness. “

Does he – or should appraisers be afraid – of legal complaints from contractors who dispute poor appraisals? “We are protected by Section 230 of the Internet Code” (Communications Decency Act of 1996), which somewhat controversially protects online service operators from such complaints, Yarkin said.

He acknowledged that the company has yet to collect data showing that its findings have convinced purchasing managers to hire top-tier suppliers.

But he said at least Massachusetts is going beyond encouraging staff members to share reviews, and is starting to distribute procurated scores to its own vendors, as a way to inspire them to improve the value that they offer, if they want to keep public business.

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