Enlightenment Capital Takes Stake in Another Government IT Firm

Chevy Chase-based aerospace and defense investment firm Enlightenment Capital said Wednesday it’s invested in another local government tech services company.

This time it’s Fairfax-based Emagine IT, which does high-end cyber, cloud and analytics consulting. Terms weren’t disclosed.

Emagine is well-positioned to take advantage of the federal IT modernization push, which is fueling other Enlightenment investments of late. Emagine is an accredited federal third-party assessment organization, or 3PAO, helping companies achieve FedRAMP compliance — an assessment and authorization process agencies use to assess security when accessing cloud computing products and services — and expand their federal cloud service offerings.

Enlightenment Managing Partner Devin Talbott hailed Emagine’s work with partners “helping them conceive, develop, and support the IT solutions that enable their customers’ missions.”

Emagine was launched in 2002 and is led by founder and CEO Aamir Saleem. Emagine made the Inc. 5000 list in 2016, reporting revenue the year before of $39.2 million and a three-year growth rate of 238 percent. Emagine’s sales dipped slightly to $37.1 million in 2016, according to Washington Business Journal research. The company’s also been featured in our Fastest Growing Companies package in the past.

Enlightenment invests in middle-market government, defense and aerospace companies, typically $5 million to $25 million to help management teams develop and build out their companies. That differs from other private equity investors in the space, such as Arlington Capital Partners and Veritas Capital, which typically take over management of their portfolio companies.

The firm disclosed in a Securities and Exchange Commission filing in April its plans to raise to $200 million for its third fund, which would bring its total capital raised to $427 million. Talbott has declined to discuss Enlightenment’s fundraising.

In February, Enlightenment invested in Arlington-based ByteCubed, a consulting firm that works with a number of government agencies on business intelligence, technology automation and data science solutions — popular buzzwords with government agencies looking to undertake sweeping IT modernization initiatives.

In September, ByteCubed acquired a D.C. creative agency to bring better user digital experiences to the federal marketplace.

These kinds of deals underscore a handful of key trends in government contracting. There’s big bucks, or the potential for lucrative contract dollars, flowing to companies fluent in business intelligence, technology automation and data science work. Government IT services companies in turn need to stand out in a crowded and competitive space, and they’re aggressively growing through M&A to do just that.

Opportunities are rich for companies that can merge technical acumen, cloud-native expertise and a commercial approach to government services to a federal market hungry to modernize outdated and expensive legacy IT systems.