The Exiger Playbook: Building a $100M ARR Business in Government Tech Without Mega VC Rounds

The Exiger Playbook: Building a $100M ARR Business in Government Tech Without Mega VC Rounds

Getting to $100M ARR typically involves massive funding rounds and aggressive cash burn. But in a recent episode of Category Visionaries, Exiger CEO Brandon Daniels revealed a different playbook: using crisis opportunities and operational efficiency to fuel sustainable growth in the government sector.

The Initial Breakthrough

During COVID-19, Exiger’s platform proved essential for government procurement. As Brandon explains: “If we would vet 1000 vendors, there would be some cases where you’d have 1015, 2030 companies that you would exclude from the bid because they were so clearly unable and unprepared to deliver.”

This success created a network effect. “Being a part of the Joint Acquisition Task Force, being a part of Operation Warp Speed, what it did was it set us apart from our competition,” Brandon notes. The result? “We ended up getting a contract through GSA to support a Federated Information Sharing, utilization or use case for our software across the federal government for all of supply chain risk management.”

The Efficiency Engine

Rather than raising massive rounds to fuel growth, Exiger focused on optimizing operations. Brandon details their approach during the 2022 downturn: “We did a much finer review of our sort of core SaaS metrics to actually dictate what we should do.”

They identified three key areas for optimization:

1. Vendor Consolidation: “We shrunk our pool of hosting companies, shrunk our pool of data providers, and actually spent more with each of them…We took our data vendors from 83 to 20, but bought more from the 20.”
2. Service Optimization: They tackled inefficient services like translation. Brandon explains: “We had just sort of taken this blunt instrument approach to translation…and it was costing us a few million bucks a year.” By building a cache system and optimizing translation needs, they reduced costs from $3 million to $150,000 annually.
3. Strategic Reinvestment: “We still got to EBITDA positive. But what we did is we took all of the benefits of these efficiency initiatives and stuck it into sales and marketing.”

The Growth Formula

This approach created exceptional unit economics. Brandon notes: “Every net new dollar that Exiger adds in terms of software revenue equals 90 plus percent gross margin.”

Instead of raising more capital, they used these efficiency gains to fuel growth: “We tried to self fund, essentially the doubling of our sales and marketing team from ten to 20 million. We tried to self fund it with Efficiencies and waste removal, which were able to do.”

Key Guidelines for Government Tech

For founders entering government tech, Brandon emphasizes preparation: “You really have to have something that’s ready for deployment in order to go into the federal government just because there are a number of gates that they have from a security perspective.”

He also stresses funding source considerations: “When you’re taking funding, when you’re looking at potential funding sources, you have to assess your foreign ownership, control and influence. Meaning focusing on Silicon Valley funds, focusing on US funds.”

The Results

The strategy worked. Brandon shares: “We went from 10 million of arr in 2019 in the third party and supply chain space to a place where in the next twelve months we’ll be at 100 million in arr.”

Looking ahead, Brandon sees continued growth: “Our aspiration is to do good and to do well…we want to be the platform that returns that conversation to a question of just performance and price.”

The lesson for founders? You don’t need massive funding rounds to build a significant business in government tech. The key is combining operational efficiency with strategic reinvestment in growth – and being ready when major opportunities arise.