Here’s the 12-page pitch deck for OppZo, a startup helping small government contractors borrow money faster


Randy Garrett Warren Reed

  • OppZo uses AI to provide quick access to financing to eligible government contractors and SMBs.
  • The startup raised a $260 million seed round of debt and equity, led by Arcadia Funds.
  • Here’s the 12-page pitch deck Oppzo used to raise the round.

The massive market for federal government contracts approached $700 billion in 2020, and it’s likely to grow as spending accelerates amid an ongoing push for investment in the nation’s infrastructure. 

Many of those dollars flow to small-and-medium sized businesses, even though larger corporations are awarded the bulk of contracts by volume. Of the roughly $680 billion in federal contracts awarded in 2020, roughly a quarter, according to federal guidelines, or some $146 billion that year, went to smaller businesses.

But peeking under the hood of the procurement process, the cofounders of OppZo — Randy Garrett and Warren Reed — saw an opportunity to streamline how smaller-sized businesses can leverage those contracts to tap in to capital.  

Securing a deal is “a government contractor’s best day and their worst day,” as Garrett, OppZo’s president, likes to put it.

“At that point they need to pay vendors and hire folks to start the contract. And they may not get their first contract payment from the government for as long as 120 days,” Reed, the startup’s CEO,  told Insider. 

That’s where OppZo steps in. The fintech, founded in 2020, works with financing partners to extend working capital loans to firms that have won contracts and subsequently need cash to quickly ramp up their businesses. Interest rates on OppZo’s loans, which range from $100,000 to $1 million in size, have a floor of 8% and a term of up to 18 months. 

On Thursday, OppZo announced it raised $260 million in seed funding. The capital is a mix of $5 million in equity investments and $255 million in debt financing led by Arcadia Funds. OppZo has already launched in beta, but the new investment will help build the balance sheet the startup needs to begin extending loans. 

OppZo digitizes a process that is often still manual and reliant on PDFs, pulling data from a variety of sources and relying on an artificial intelligence-driven algorithm to speed up the underwriting process.

“We take that entire six to eight week process and we condense it down to a matter of a week or two. The goal is to continue to compress that overall timeframe down to one or two days,” Reed added.

Bridging this financing gap can have far-reaching impact. Small-and-medium sized businesses are too often denied access to credit from traditional lenders, Garrett and Reed said. But in their view, a government contract is a valuable, untapped source of financing that “is basically just as good as Treasury paper.”

OppZo focuses on smaller businesses operating within Opportunity Zones, or economically distressed areas designated in the 2017 Tax Cuts and Jobs Act as eligible for tax-advantaged private investments.

Reed, who prior to starting OppZo worked in wholesale payments at JPMorgan, also worked at the US Treasury from 2014 to 2017, where he saw firsthand the beginnings of Opportunity Zone policy. “I had a lot of history around that particular legislation and the impact of driving capital to be these particular communities,” Reed said. 

OppZo now counts some 2,000 customers in its pipeline, Garrett and Reed said. By year four of operation, they hope to originate more than $4 billion in loans. And after launching in Florida, Maryland, and Virginia, they plan to expand OppZo to Opportunity Zones across the US. 

See the 12-page pitch deck OppZo used to raise $260 million in equity and debt capital. 

OppZo pitch deck



OppZo


OppZo pitch deck



OppZo


OppZo pitch deck



OppZo


OppZo pitch deck



OppZo


OppZo pitch deck



OppZo


OppZo pitch deck



OppZo


OppZo pitch deck



OppZo


OppZo pitch deck



OppZo


OppZo pitch deck



OppZo


OppZo pitch deck



OppZo


OppZo pitch deck



OppZo


OppZo pitch deck



OppZo


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