Meet Dcode, a Washington, DC, accelerator that teaches the government to work with startups — and helped startups win $198 million in federal contracts

Dcode CEO Meagan Metzger

Dcode, a Washington, DC-based startup accelerator, helps startups to navigate government contracts and talk to Naval commanders.
Dcode also works with military officers and federal bureaucrats to tone down bureaucratic double-talk and not scare tech founders off.
The end result can make powerhouse combinations – especially for a government seeking innovation to address a pandemic and starts seeking cash in a recession.
Dcode says it has helped companies win $198 million in federal contracts – and some, like unicorn DataRobot, have gone on to great things, and millions in funding.
Visit Business Insider's homepage for more stories.

Startups need cash, and the federal government needs their innovation. It seems like that would make for common sense transactions – but the two cultures are dramatically different. And that's where the startup accelerator Dcode comes in.

"We've helped startup founders buy their first suits," says Nate Ashton, managing director of Dcode's tech programs. "And taught them how to address someone with a military title. They just don't know."

The Washington, DC, matchmaker between tech and government puts together some powerful connections – especially now, as tech seeks funding in a recession, and government needs innovation to address a pandemic.

"Dcode became real the day I emailed about 500 venture capitalists to say, 'We can make the federal market easy for tech companies'," CEO Meagan Metzger says. "The response was overwhelming."

The 20-employee accelerator founded in 2015 provides what Metzger calls "one central place where high-growth emerging tech companies and federal agencies can meet to learn and work together." Dcode says it has helped companies win $198 million in federal contracts.

Dcode says it also provides guidance on paperwork and approvals that can cut the wait for federal funding from two years to as little as six months. And the payoffs can be significant.

Dcode Accelerator

What does that look like? Weeks of training in pitching, contracts, and cultural differences, culminating in speed-dating sessions and longer conversations between members of the two groups. In a February accelerator project, Dcode introduced a dozen artificial intelligence companies to federal agencies, and last summer it did the same again with seven cybersecurity companies.

"The federal market is an opportunity for tech companies looking to diversify their revenue and build recession resilience," says Phaedra Chrousos, a member of Dcode's board and chief strategy officer of The Libra Group, a global conglomerate.

But first those two very different communities must come together, and that is a fascinating blend of two very different cultures that Dcode may be unique in managing. And so far, it's had some success stories.

Dcode alum DataRobot, a Boston startup that helps large enterprises automate data management, is working with the White House COVID-19 Task Force. RiskIQ, a San Francisco cloud security startup, helps 16 federal agencies defend against hackers.

And Arlington, Virginia's Stardog helps NASA better organize data for its missions to the moon and Mars, providing what NASA data integration manager Andrew Schain calls "a 10 to 1 savings. It's not only less overhead, it's much better job satisfaction and getting the knowledge in hand that you lacked before."

Stardog's CEO, Kendall Clark, passes along some of the credit to Dcode, saying: "Dcode's guidance on how to do business with the federal government is critical for future growth."

Generals in hoodies

Coming from the other direction is Commander Sam "Chubs" Gray of the NavalX program, bringing new tech to the Navy, who says he might not meet startup founders if not for Dcode. "These are companies that are probably not coming to industry conferences and, if they do, they don't know how to connect with the massive enterprise that is DoD acquisitions."

Dcode gives military officers and federal bureaucrats like Chubs guidance on how to talk to techies. "Avoid scaring off tech companies," Dcode advises in a blog post, because "technologies aren't necessarily chomping at the bit to work with government." Dcode advises the feds to go easy on the bureaucratic double-talk: "Your team may not be easily understandable to a tech start-up."

Chrousos, the Dcode board member, worked to bring tech to the government as an Obama administration appointee to the General Services Administration, an oversight agency that helps other branches of government. She says a venture capitalist once told her: "I would never allow one of my portfolio companies to go after the government market" because of the long and arduous contracting process.

But that process can be worth it for not just startups, but investors.

The accelerator recently launched an investment network, Dcode Capital, which has invested over $3 million in tech companies that are working with dozens of federal agencies.

Dcode alum DataRobot pulled in a $206 million Series E investment round led by Sapphire Ventures in September, to bring its total funding to $431 million.

Chrousos, who also works with the investment network says "Tech companies working in the federal market are strong bets, especially now."

Join the conversation about this story »

NOW WATCH: We tested a machine that brews beer at the push of a button