More From Green Room
There are over 20,000 city, county and government agency organizations of size in the United States that employ over 1 million operating personnel that each day work through repetitive rules-based processes determined by previous council decisions, municipal code, and state law. A significant labor allocation is required to produce high-quality governance, compliant city planning, transparent procurement, and responsive citizen and records requests. It’s a perfect space to apply AI to drive automation of the universal local government workflow use cases. We estimate this software market opportunity to be an estimated initial $500M-$1B TAM.
Let’s just take one common use case as an example: public records request discovery.
Old way: A simple public-records request becomes a slog. Staff hunt across SharePoint, OneDrive, and inboxes - piecing together email threads; read every page for PII, medical data, and privilege; hand-redact line by line; and hope nothing is missed. Days/weeks go by, hundreds of staff hours vanish, and the margin for error — and legal exposure — grows with every manual step.
New way with Madison AI: The same request is handled end-to-end in minutes. Madison’s agents search across communication platforms, consolidate threads, and auto-sort results aligned with state law. The agent then flags PII, SSNs, medical data, and attorney-client content with ~90–95% classification accuracy, and applies redactions.
Result: Processing time drops from ~2 weeks to ~20 minutes, freeing staff to serve the public while improving consistency and compliance.
In 2024, after over a decade of experience delivering local government software and consulting, Erica Olsen launched Madison AI — the AI agent platform for local government, building upon a co-development project with the city of Reno NV that demonstrated the value of AI in government workflow.
Fast forward since that initial Reno project, Madison now has over 35 city, county and agency customers, and their AI platform delivers a growing suite of specialized AI agents and government-specific data integrations to accurately and securely automate a growing scope of government work.
We first met Madison in the summer of 2024 at a Kansas City gov-tech conference put together by our friends at CivStart. Of the early-stage companies presenting on the sidelines of the conference, we noted the potential Madison had to apply the capabilities of LLMs to the vast operational data and information that underlies a city or county. As Madison gained impressive traction over the last year, CreativeCo and the Madison team became aligned on the opportunity to invest.
We’re pleased to announce that CreativeCo Fund III has made a $2.5M growth equity investment in Madison AI.
CreativeCo Fund III has a rule for only investing in fast-growing software companies that are at the same time highly capital efficient — defined by ARR greater than lifetime burn. While it’s hard to find this metric combination, we believe this bootstrap culture in a growth business is a winning attribute and culture for long-term value creation.
We are investing in the architectural shift to AI and the associated greenfield value propositions that are differentiated from legacy SaaS software. We see this meaningful opportunity for startups to build value quickly across all vertical markets. Madison has a great start in the local government market.
Team CreativeCo is excited to support the Madison team as they partner with cities, counties and agencies to embrace their specific data and information and deliver new levels of workflow automation with highly specialized AI agents. We expect to have over 100 government organizations using our agents as highly skilled working collaborators in short order — demonstrating our proven position in this emerging space.
Madison joins ProLine (AI agents + SaaS for roofing contractors), Swivl (AI agents for self storage operators), and Churnkey (revenue retention automation for subscription businesses) in our CreativeCo Fund III portfolio. Madison is our sixth govtech investment we’ve made since 2020, joining BusRight, Citibot, CivicEye, DebtBook, and UrbanSDK.
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