Levelset, a New Orleans-based SaaS platform that helps relieve cash flow issues for contractors by getting them paid more quickly, has announced a $30 million Series C round of funding led by Horizons Ventures.
S3 Ventures, Altos Ventures, Operating Venture Capital, as well as Michael Gollner and Darren Bechtel of Brick & Mortar Ventures, also participated. As a result of this funding round, Levelset has raised $47 million to date.
Levelset aims to simplify and solve payment problems associated with construction businesses operations and processes — and their associated stresses — by using products and industry partnerships that help contractors. The company’s software and free resource library, which includes a roster of payment and legal experts, offers data-driven payment insights. It also facilitates generation and exchange of paperwork, and monitors relationships and projects, and identifying potentially problematic behaviors.
“Getting paid in construction is complicated,” says Levelset CEO Scott Wolfe. “It’s paperwork heavy, it requires multiple tiers of parties to exchange information between one another, and it’s subject to complex laws and compliance requirements. Plus, it’s just plain stressful.”
“Our software makes the payment paperwork and process easy, faster, and more collaborative for contractors, and leverages a massive data set to provide insights about the people who are handling the money due to them,” says Wolfe.
Levelset’s roots lie in Wolfe’s background working in his family’s New Orleans grocery business. When Hurricane Katrina hit the city in 2005, his father, who’d wisely established a “tiny” construction business dedicated mostly to building the family’s stores, understood both the opportunity and necessity to pivot fully into construction. “It was the only viable thing left for my family to make ends meet,” says Wolfe.
He became an attorney and practicing construction law. Once ensconced in the industry, he kept encountering the same problem again and again: paying contractors, who would come to him stressed out about cash. Wolfe says the problem was amplified as thousands of contractors were working, post-Katrina, to clean up and rebuild the city. Money was tight for everyone, plus funding was being held up in complex insurance disputes and other problems.
“It struck me that a lot of the payment processes and paperwork were perfect for a SaaS solution, like Levelset,” says Wolfe.
Payment and cash flow issues are endemic to the construction industry. Research from Levelset and PWC show that contractors take an average of 83 days to get paid, and more than half of those contractors experience significant cash stress as a result.
In a statement, Bart Swanson of Horizons Ventures touted Levelset’s unique ability to understand the construction industry’s payment pain points.
“Levelset is solving an acute and important pain experienced by millions of contractors, and by doing so has built an interesting and unique dataset about construction payment behaviors,” said Swanson. “This gives more value to users, delivers more growth and, ultimately, empowers contractors to eliminate cash gaps and take on more work.”
Formerly known as zlien before a March 2019 rebrand, Levelset plans to use the new funds to develop more products and jump-start growth. The company is concentrating on content creation, building its expert contractor network, and lowering or eliminating fees to exchange payment documents.
“We have seen a ton of growth across our teams, especially in our Austin office and on our sales and customer success teams,” says Wolfe. “The problem we are solving is massive and happening on a global scale. We are the ones that can solve it, and that’s why we have been able to secure such great capital so far. We’ll see where we go from here.”