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."
GovTech Innovation: Streamlining the Public Planning Process
The £2.8 million pre-seed funding round for Xylo GovTech highlights the accelerating modernization of public planning and local government services in the UK and Ireland. Local planning authorities frequently face huge backlogs due to paper-heavy application reviews and complex regulatory requirements. Xylo GovTech is developing AI-driven software that automatically screens planning applications against local development plans, national regulations, and environmental constraints.
This automated screening helps planning officers identify non-compliant applications early, reducing processing times and enabling faster approvals for compliant housing and infrastructure projects. The pre-seed capital will be utilized to run pilot programs with key UK councils and expand their software engineering team.
Frequently Asked Questions
What is GovTech?
GovTech refers to technology solutions designed to improve the efficiency, transparency, and delivery of public services by local and national government agencies.
How does Xylo's AI software benefit local councils?
It automates the initial screening of planning applications, flagging potential zoning or compliance issues and reducing administrative backlogs for planning departments.
Who participated in the £2.8 million pre-seed round?
The round was backed by specialized GovTech and early-stage software venture capital funds, along with strategic angel investors from the real estate and public sectors.
Regulatory Compliance and Audit Trail Security in GovTech
As local councils adopt automated planning tools, ensuring auditability and compliance with public administration laws is paramount. Xylo GovTech's platform features a built-in immutable audit trail, logging every automated check and policy lookup. This ensures that planning officers can explain and verify the rationale behind any flagged application, maintaining transparency and protecting the local authority from potential judicial reviews or planning appeals.
The pre-seed funding will also support the development of a security-shielded integration layer, allowing Xylo's AI to securely pull data from national databases-including environmental registers, flood risk maps, and historical heritage listings-without exposing sensitive public records to external networks.
Regulatory Compliance and Audit Trail Security in GovTech
As local councils adopt automated planning tools, ensuring auditability and compliance with public administration laws is paramount. Xylo GovTech's platform features a built-in immutable audit trail, logging every automated check and policy lookup. This ensures that planning officers can explain and verify the rationale behind any flagged application, maintaining transparency and protecting the local authority from potential judicial reviews or planning appeals.
The pre-seed funding will also support the development of a security-shielded integration layer, allowing Xylo's AI to securely pull data from national databases-including environmental registers, flood risk maps, and historical heritage listings-without exposing sensitive public records to external networks.
