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Technology
Scott Wolfe, chief executive officer of Levelset, the New Orleans-based money management and payment startup for contractors in the construction industry, always thought he&d be in the grocery business.
His family owned a number of grocery stores around New Orleans and he was readying himself to go into the family business when Hurricane Katrina hit.
As the family business faced significant losses in their stores, the construction and contracting service they&d built to develop the land the stores were on had a tremendous opportunity. Within the span of a year, Wolfe had pivoted the familyoperations to focus on renovations and restorations and launched fully into construction.
It was during that time that Wolfe saw the need for some sort of software service that could manage cash flow and payment for the tens to hundreds of small business contractors involved in getting a project done.
So he built Levelset to be that service.
Now the company has closed on $30 million in financing from Horizons Ventures, the investment firm backed by Li Ka-shing, who is one of the worldwealthiest billionaire property developers.
When Bart Swanson, an advisor to Horizons, met Levelset through a mutual friend who did some investing around the New Orleans-based Tulane University ecosystem, he immediately felt it was an opportunity that the Horizons investment committee would understand.
&This is a global issue,& says Swanson. &Sixty-fourpercent of construction businesses fail in their first five years because they have nowhere to turn for help,& when it comes to ensuring payment.
For now, Levelset is focused on digitizing billing and payments and providing insights into who is actually on a job site and the responsibilities that those workers have on site, according to Wolfe.
&Therea ton of investment that has gone into the field,& says Wolfe. &What has seen a lack of as prolific an investment are things behind the scenes outside of the field that happen in the office. This is the accountants and administrative workers who have to take the information thatin the field and turn it into money.&
For developers like Cheung Kong Holdings, Lidevelopment business, the promise of Levelsetsoftware is a huge boon. The construction industry runs on small businesses that lack software and services to process payments quickly. The time it takes to deal with paperwork can delay a project and ultimately cost developers money.
Horizons was joined in the new round by S3 Ventures, Operating Venture Capital, Altos Ventures and Darren Bechtel of Brick - Mortar Ventures. As a result of the investment, Swanson will take a seat on the companyboard.
In a recent survey of contractors by Levelset and T-Sheets by Quickbooks, more than half of contractors stated they were not paid on time and had significant cash flow challenges, and more than 75% craved more transparency in the payment process. This is no surprise, given PWCworking capital studies in the past decade demonstrating that construction industry payment speeds are the slowest of all (83+ days).
&The effort required to get paid, and the cash stress put on contractors is unbelievable,& said Wolfe, in a statement. &The worldbiggest industry is full of small and medium businesses who are the fabric of our economy. Itcrucial that they can do their work without worrying about cash.&
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Read more: Levelset raises $30 million to improve money management for contractors in construction
Write comment (91 Comments)Leapfin, a startup selling corporate finance tooling, announced a $4.5 million round this morning. The funding event was led by Bowery Capital, and included dollars from a number of former technology executives.
Before its newly announced investment, the company had raised just a small seed round. The small capital amounts may seem inconsequential, but they&re more strategic than anything. According to Leapfin CEO Raymond Lau, the company is running lean and keeping an eye on profitability.
After being founded in 2015 and starting commercialization of its product in 2018, the company is stepping a bit further out of the shadows this morning. Lettalk about what it does, and why both its product and business philosophy are neat.
What it does
Leapfin helps companies track their revenue and cost of revenue expenses.
In more human terms, Leapfin helps companies track sales, and how much it costs to create and distribute its goods and services to customers. &Cost of revenue,& also known (roughly) as &cost of goods sold,& may sound like a jargony accounting term, but in reality ita bedrock business concept that anyone involved with startups needs to understand.
Letexplain why. Once you deduct costs of revenue from revenue itself, you&re left with gross profit. Thatwhat businesses use to cover their operating costs. And, crucially, the larger a companygross profit is in relation to its revenue, the higher margin its revenue is; investors love high gross margin revenue.
In part, their high gross margins are why software startups are worth so much.
Back to Leapfin, its product is a shot at making business a more limpid process. In a call with TechCrunch, LeapfinLau explained that many companies only have &one-in-thirty& visibility into their operations; that business owners only manage to fully collate their revenue and cost of revenue results monthly, meaning that the rest of the time they are flying at least partially blind.
The goal of Leapfin, according to Lau, is to provide a &single source of truth& for ongoing business results, using &robotic process automation& to help companies cut down on repetitive work. So Lepafin does two things: helps companies know where they stand financially, and saves them time on rote tasks that tend to come with accounting.
The company is pretty happy with its ability to sell its product so far. Lau told TechCrunch that it has found &very, very strong product market fit,& for example. Asked to describe when he felt that Leapfin had gelled with the market, Lau explained that in his view, product market fit is more &process& than a &tipping point,& but that he was confident in Leapfinproduct-market harmony when its customers began referring other companies (to a product that costs six-figures annually), and its sales cycle tightened.
Why the company is cool
Leapfin is run a bit differently from most SaaS companies that we cover. Instead of raising lots to invest in blow-out sales and marketing expenses, Leapfin is running pretty lean.
TechCrunch asked Lau why he only raised $4.5 million in the new round, which, given the product progress his company has made, felt modest. He said that the Leapfin staff &are outsiders in a way,& and that while his &peers are raising tens of millions,& his company could be profitable by the third quarter of next year. So Leapfin doesn&t need more money, and selling shares ahead of growth is an expensive way to raise capital.
Lau also said, however, that his companysmall raise &doesn&t mean that [it] won&t raise more down the road.& Another check in 2020 to ward off any downturn fears would make some sense. But Leapfin probably won&t sweat a crash too much, as the company keeps profitability and cash flow positivity &in sight,& according to its CEO.
Despite that, the company expects to hire quickly, expanding from around 20 people today to 50 by the end of next year. What we need next from Leapfin is an ARR number so we can vet just how much product market fit it really has.
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Transport for NSW will be rolling out digital Opal cards for use on smartphones and wearables in 2020, according to a new report by the Sydney Morning Herald.
The NSW government has confirmed it will be trialling the tech next year, and those involved in the test will be able to use their phone or wearable’s digital wallet to pay for all forms of p
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Read more: NSW Opal cards will finally go digital in 2020
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A new report from Have I Been Pwned has revealed that a data breach at the online game company Zynga back in September affected 170m users.
To make matters worse, the Zynga hack ranks 10th among Have I Been Pwned's list of its all-time largest hacks of user information.
In September, Zynga admitted that it had suffered a breach that affected two of
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Read more: Love playing Draw Something or Words With Friends Change your password now
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If you're looking to score a deal on an older generation iPhone, then you've come to the right place. Well, not really that old – it's last year's model.
Starting today Verizon is offering the iPhone XR for free when you switch to Unlimited. This limited-time promotion ends on Christmas Day.
The iPhone XR features a 6.1-inch Super Retina OLED
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Read more: Verizon phone deal: get an iPhone XR for free when you switch to Unlimited
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It's that time of year again: the snow is falling, the air hurts your face, everyone is getting together with their family for the Holidays and, of course, the Steam Winter Sale is here.
Just as every year, there are thousands of games on sale on the biggest PC game distributor out there, including some of the biggest PC games of the year like
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Read more: The Steam Winter Sale is on – time to break out those wallets
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