Levelset contech payments startup adds reviews for general contractors - Business Insider

Late payments are an unfortunate, but constant, part of construction.Levelset, a construction tech startup that assists in processing payments for contractors, has launched a new Glassdoor-like feature. Contractor Profiles are free, public-facing profiles that compile private and public information with user-submitted reviews to reveal how quickly, and easily contractors pay their subcontractors. Levelset announced last month that it raised a $30 million Series C fundraise led by Hong Kong-based Horizon Ventures, and also included funding from Darren Bechtel of Brick & Mortar Ventures, S3 Ventures, and more. Read more BI Prime stories here.Late payments are an unfortunate, but constant, part of construction.The problem made headlines back in 2016, when reports came out that then-candidate Donald Trump had allegedly not paid hundreds of contractors and employees for their work. While some developers pay late, the problem is common for general contractors paying their subcontractors as well. A report by construction tech payment company Rabbet and project management company ProCore found that 30% of the general contractors and subcontractors they interviewed had their work delayed or stopped in the past year due to late payments. Levelset, a construction tech company that assists in processing payments for contractors, has added a new Glassdoor-like feature aimed at combatting the issue. Its Contractor Profiles are free, public-facing profiles that compile private and public information with user-submitted reviews to reveal how quickly, and easily contractors pay their subcontractors.Construction tech — or contech — startups have been attracting a wave of funding and are looking to disrupt an industry that's notoriously slow to embrace change.Levelset Chief Executive Scott Wolfe said that the startup is the first company to offer this information publicly. “The insights that are delivered on these profile pages are new to us and new to the industry,” Wolfe said.Levelset announced last month that it raised a $30 million Series C fundraise led by Hong Kong-based Horizon Ventures, and also included funding from Darren Bechtel of Brick & Mortar Ventures, S3 Ventures, and more. The company has raised $47 million in funding since 2015.Wolfe founded the company in 2005, but says that he didn't start working on it full time until 2012. A New Orleans native, Wolfe was working in construction law when Hurricane Katrina hit. His family, which had previously operated a retail business, became heavily involved in reconstruction efforts. While working with contractors, he noticed one problem repeating itself. “Contractors struggled to get what they earned on a job,” Wolfe told Business Insider. Levelset's newest feature is an extension of the original product to speed up the construction payments process.Contractor Profiles show user reviews, payment terms and speed, any problems with payment, and realtime alerts if payments have slowed down. The information is compiled from more than 800,000 documents that Levelset has processed, as well as public information related to permitting and user reviews. “We're in the middle of a lot of transactions,” Wolfe said. “That gives us the opportunity to credibly put together a profile of a contractor's payment behaviors.” Wolfe compared Levelset's position to Glassdoor. Not only does it provide information that was previously private and based on word-of-mouth, but the company also uses that information to drive business. Where Glassdoor uses reviews as a way to connect people to jobs, Levelset will use the contractor information to get more subcontractors to use its platform. The company has 7,700 contractors uploaded so far with plans to upload another 10,000 over the next three months. It has also compiled a list of the payment behavior of the 300 largest contractors in the country. Like any online community, there are concerns about the veracity of user-created reviews. Wolfe said that the “bulk” of verified reviews have been positive, which indicates that most contractors are using the platform to “encourage good behaviors instead of using it as a place to burn somebody.” Levelset will have staff moderate the reviews, verifying that contractors have actually worked together and that comments abide by community guidelines. While this is a new challenge for Levelset, it's a common part of online communities. “This is not a new problem,” Wolfe said. “Tons of communities out there that have this challenge.”Read more: Construction tech is looking to disrupt an industry that's been notoriously slow to embrace change — insiders say these are the 10 contech startups to watch in 2020