GovTech in 2025: An Early Look At What To Expect The Rest of This Year

Over the past 8 years, the GovTech market has consistently outpaced both GDP and broader US IT spending—and 2025 is shaping up to be no exception.

GovTech growth has surged during times of economic downturns, even growing 3.16% in 2020 while GDP contracted. Now in 2025, GDP is once again showing early signs of contraction, but we are still projecting GovTech to grow 6.4%, outpacing projected US GDP and IT Spending.

So what does this tell us?

➡️ Government is increasingly counter-cyclical in tech investment.
➡️ When uncertainty hits, state and local agencies double down on modernization, efficiency, innovation, etc.
➡️ GovTech is no longer a niche, and the latest market moves are showing that the PEs, VCs, and others know that GovTech is a resilient market that performs.

This is why we believe the GovTech decade is just beginning. As agencies prioritize AI, cybersecurity, and digital service delivery, GovTech is just warming up.