Polimorphic raises $18.6M to bring AI chatbots to local governments

New York-based startup Polimorphic has raised $18.6 million in Series A funding to expand its AI-powered chatbots and support services for local governments. The round, led by General Catalyst with participation from M13 and Shine, brings the company’s total funding to $28 million as it targets a market that Silicon Valley has historically overlooked despite its critical need for technological modernization.

Why this matters: Local governments face a severe staffing crisis and work overload, with administrative employees bogged down in routine tasks that could be automated while more impactful community work falls through the cracks.

• “Folks underestimate how critical a lot of local government and state agency work is,” Polimorphic co-founder and CEO Parth Shah told Semafor. “It’s not the public servant’s fault. They’re trying their best. They just haven’t had the right systems.”
• The worker shortage, exacerbated by an aging population and competitive private sector salaries, has slowed permit approvals and contributed to employee burnout across municipalities.

What you should know: Polimorphic’s technology handles administrative tasks like processing forms, providing status updates, and routing residents to appropriate departments across more than 75 languages.

• The company’s products include website chatbots, AI-powered phone services, and agents that review applications and reach out to residents who incorrectly filled out forms.
• Each local government bot is trained on hundreds of pages of local regulations and must decipher which responsibilities belong to different levels of government—cities, counties, townships, or special districts.
• Customers have reduced voicemail messages by 90% due to the voice assistant helping residents answer questions directly.

The big picture: General Catalyst partner Sreyas Misra sees Polimorphic as potentially becoming “the next system of record for local government,” noting that “from DMV requests to social services, most processes still rely on paper or legacy systems.”

• The startup competes with other chatbot providers including Norway-based Boost.ai and IBM, which worked with Austin, Texas, to provide COVID-19 information using its watsonx virtual assistant.
• PitchBook, a financial data provider, estimates Polimorphic’s valuation at around $70 million, though the company did not disclose official figures.

Key details: The funding will support hiring salespeople and support staff as Polimorphic expands into new states, with pricing based on population size and user volume.

• Basic website and phone service bots cost as little as a few hundred dollars monthly based on area population, while additional services are priced per user.
• In areas where both city and county subscribe to Polimorphic’s service, the system can better route residents to the departments they need.

Notable challenges: AI chatbots for government services face accuracy concerns, particularly when scraping internet information that may contain errors.

• A ChatGPT-powered assistant for Osaka, Japan residents gained notoriety two years ago for hallucinating event cancellations and date changes.
• Texas recently enacted a law requiring government agencies to clearly disclose when residents are interacting with AI systems on state websites, promoting transparency in AI adoption.