Beam, a five-month-old startup that aims to make it easier for general contractors to pay subcontractors and get paid themselves, has raised $4 million in a seed funding round led by Accel.
Both the founder of the start-up and the lead investor previously worked for years at payments giant Stripe. Before starting Ray in October 2022, Adam Eagle had worked for five and a half years as a software engineer at the fintech company Building core APIs and infrastructure for Stripe billing, billing, commerce and payments. Amy Sapperlead investor in the round, assisted building and growing Stripe’s product marketing team before joining Accel as a partner in 2019.
Saper partnered with Eagle as its product marketing counterpart as he built out the Stripe billing and billing product, seeing firsthand its technical capabilities. So when the company looked to raise money, Accel stepped up to lead the raise, which closed earlier this year.
Building for (literal) builders
A common refrain in the construction industry is that most contractors are forced to complete projects before they get paid, often paying for material and labor out of pocket. For smaller operations it can be stressful if not enough money comes in and keeping track of who owes what through spreadsheets and sometimes using paper checks can be very time consuming and tedious.
San Francisco-based Beam focuses on helping smaller and medium-sized home construction contractors save time—and ultimately money—by giving them a way to “streamline” payments, invoices, and receipts in one place. It also facilitates ACH payments directly in the app. It takes “minutes” for contractors to get on board with Beam and once they are, they are can begin sending payments immediately, Eagle said.
The move from payments to building technology may seem like a big shift, but for Eagle it was something that was almost inevitable. Before he started writing code, Eagle said he was always “super interested” in architecture and housing.
“After years of seeing the headlines about the housing crisis and our aging infrastructure, I decided I really wanted to work in something related to construction housing, infrastructure and the physical world,” he told londonbusinessblog.com in an interview. “A lot of it is simply driven by a desire to improve the quality of life and the quality of our cities.”
In examining the space, Eagle concluded that construction companies have “really tough” financial operations. He also realized that many such companies are SMEs or small family businesses with only a few employees and minimal resources. As a result, owners either have to spend a lot of time processing invoices and payments manually or spend the money hire a bookkeeper or office manager.
“If you think about the financial situation of these construction companies, you realize they’re in pretty tough situations — often they’re waiting for payment from the customer or have large sums to pay to subcontractors,” Eagle said. “Or if you’re a subcontractor, you have to pay a lot of money for materials and you have to pay payroll up front and then you might not get paid until 30 or 60 or 90 days after the work is done.”
To keep costs down for contractors, Beam claims it charges lower transaction fees compared to the likes of PayPal or Zelle, which also put limits on transaction amounts.
“That’s one of the many reasons many construction companies still use paper checks,” Eagle said. “Because on every single payment they lose anywhere from $15 to hundreds of dollars because of the high fees charged by the payment networks.”
Recognizing that a large percentage of its clients are native Spanish speakers, Beam built the first version of his product to include Spanish localization for non-native speakers.
Image Credits: The five-person team of Beam/Beam
Briq is an example of another fintech aimed at the construction industry. Eagle believes Beam differs in that Briq is more focused on building tools for large enterprises to automate their billing process.
In the long term, Beam also aims to simplify payments for enterprises.
Susa Ventures and Wischoff Ventures also participated in the seed funding, alongside a group of angel investors, including founders and executives of several large and medium-sized fintech and construction companies.
For Accel’s Saper, issues like what Beam is trying to address have contributed to the housing shortage in this country.
“IIt’s too hard to build,” she wrote in a blog post. “As deep investors in fintech-related companies (including Unit, Braintree, and Venmo), we’ve seen innovation in payments and billing touch so many other industries. However, construction-related invoicing has yet to experience its renaissance.”
Beam, Saper added, is addressing this issue with its “easy-to-use billing and compliance platform” that “brings together different parties in the Beam network to enable seamless and fast payments.”
“In the long run, Beam will integrate even more financial services into their platform,” she said.
