Government technology startup Xylo has raised £2.8 million in pre-seed funding to commercialize its AI platform designed for municipal planning departments. The funding round, led by Dutch venture capital firm CapitalT, will support engineering hiring and product expansion across local councils in the UK and Ireland.
Co-founded by Habs Isabelle Kim and Irish entrepreneur Dermot O'Riordan, Xylo is addressing a major headache in municipal administration: the backlogs, paperwork, and staffing shortages that slow down local planning and development approvals.
Pilots Show 40% Increase in Planning Officer Throughput
Local planning departments are heavily burdened with administrative tasks. Every time a new building or renovation application is submitted, planning officers must manually verify hundreds of pages of documentation, check compliance with local zoning guidelines, and compile community consultation responses.
Xylo’s platform utilizes custom AI agents designed to handle these repetitive, document-heavy workflows. The system automatically reads submission files, checks for missing data (such as environmental reports or scale drawings), and drafts initial response templates for planning officers to review.
Early pilot tests have shown impressive results. Local councils using Xylo reported a 40% monthly increase in the number of applications processed per officer, alongside a dramatic reduction in administrative errors and processing delays.
300+ Hours of Side-by-Side Planning Officer Research
The co-founders spent over 300 hours sitting side-by-side with municipal planning officers in the UK and Ireland to understand their exact workflows, system integrations, and daily challenges. This research helped them design an AI system that respects local government protocols and integrates with legacy software systems.
"We didn't build this to replace human planning officers," noted co-founder Dermot O'Riordan. "We built it to take away the hours of document formatting and checking, allowing officers to spend their time where it matters: applying judgment and serving their communities."
The Rising GovTech Opportunity in Europe
In addition to CapitalT, the round saw participation from Sure Valley Ventures (SVV), Common Magic, Tiny VC, Endurance Ventures, and prominent angels from DeepMind, Gensyn, and Dawn Capital.
Sure Valley Ventures, which invested through its second Irish-focused fund (SVV2), noted that the GovTech sector is experiencing rapid tailwinds. "Local governments are looking for practical, secure, and compliant AI integrations to manage their resources," said Sure Valley Ventures. "Xylo's deep user empathy and practical technology make them a clear standout in this category."
