Fearless to launch organizational management division with $17M in new financing

Baltimore tech company Fearless has secured $17 million in new financing to branch out beyond software and launch a division focused on helping fix the organizational flaws that prevent companies and the government from taking advantage of new technology.

The new division, called Fearless Guides, will help organizations reform their internal structure and other aspects of how they work and manage their staff. The company is planning on using $17 million in debt financing from Truist Bank and Maryland Small Business Development Authority (MSBDFA) to help propel the new division and get ready for future growth through acquisitions.

"It's the second half of our value proposition," CEO Delali Dzirasa said. "We can bring the tech but also bring organizational management work so we can really see change."

The new division and debt financing is part of Dzirasa's goal for Fearless to generate $1 billion in revenue by 2030. The company is projecting $100 million in revenue this year, primarily by creating software for government clients, and the new division will also see Fearless move into more work with the private sector. Fearless has largely eschewed equity financing since its start in 2009 and Dzirasa said debt financing offers a chance to stimulate the growth necessary to dramatically increase the company's revenue without dipping into cash flow or losing control of the business by giving away equity. Fearless is planning to raise another $10 million in financing by the end of the year.

For Fearless, improving the internal management of a company is a natural outgrowth of its core government software business, which will now be called Fearless Digital, Dzirasa said. Many times when a technology fails, it’s not the fault of the software, but rather the organizations trying to use the program. People in different departments may disagree on how a technology should be used or a company does not properly tell staff how to use the product. The result is that a problem may persist even after Fearless comes up with a technical solution. Dzirasa believes there is a big market for organizational management and expects the business to generate $100 million in revenue by 2030.

“The tech is easy but people are hard," said John Foster, the company's chief impact officer, who previously served as chief operating officer. "This investment is to be intentional about tackling the root of the systemic problems that we typically see in our engagements and partnerships with the government.”

The organizational management division was initially planned as a product mostly tailored to the private sector as Fearless tries to expand outside of its base of government contracting, but it has attracted more government customers. At the same time, the Baltimore company is seeing more private sector clients such as the National Football League become more interested in software, Dzirasa said. The new division allows Fearless to try a new approach with existing customers while continuing to play to its strengths as it recruits new clients.

“Do the same thing you're doing today for a new customer. Or do something different for an existing customer, but don't do a new thing for a new customer,” Dzirasa said.

Foster believes that Fearless can make more inroads into the private sector by focusing on equity. After the murder of George Floyd in 2020, many companies have placed an emphasis on diversity by hiring more minority staff members or trying to work with minority-led companies. This provides a chance for Fearless to bring in its organizational management division and a focus on diversity, equity and inclusion principles as a way to add value for clients beyond software.

“After you see enough of the same problems and solutions starting to repeat themselves time and time again, the next step is figuring out a solution,” Foster said.