Beam, a five-month-old startup out to more easily help general contractors pay subcontractors and get paid themselves, has raised $4 million in a seed funding round led by Accel.
Both the startup’s founder and lead investor previously spent years working at payments giant Stripe. Before starting Beam in October of 2022, Adam Eagle had spent five and a half years as a software engineer at the fintech company, building core APIs and infrastructure for Stripe billing, invoicing, commerce, and payments. Amy Saper, lead investor on the round, helped build and grow Stripe’s product marketing team before joining Accel as a partner in 2019.
Saper worked with Eagle as his product marketing counterpart when he built out the Stripe billing and invoicing product, seeing firsthand his technical capabilities. So when the company set out to raise funds, 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 getting paid, often having to pay for material and labor out of pocket. For smaller operations, not having enough funds coming in can be stressful and the process of keeping up with who owes what via spreadsheets and at times using paper checks can be very time-consuming and tedious.
San Francisco-based Beam is focused on helping smaller and mid-sized general residential 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 into its app. It takes “minutes” for contractors to onboard onto Beam and once they are, they can start sending payments immediately, Eagle said.
Going from payments to construction tech might 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 headlines about the housing crisis and our aging infrastructure, I decided that I really wanted to work in something that would touch on construction housing, infrastructure and the physical world,” he told TechCrunch in an interview. “A lot of it is just driven by a desire to improve the quality of lives and the quality of our cities.”
Upon researching the space, Eagle concluded that construction businesses have “really onerous” financial operations. He also realized that a lot of such businesses are SMEs or small, family-run organizations with just a few employees and minimal resources. As a result, owners either have to spend a lot of time manually processing invoices and payments or spend the money to hire a bookkeeper or office manager.
“When you start thinking about the financial situation for these construction businesses, you realize that they are in pretty dire situations – a lot of times they’re waiting to get paid from the client or they have to pay large amounts to subcontractors,” Eagle said. “Or if you’re a subcontractor you have to pay a lot of money for materials and you have to make payroll upfront and then you don’t get paid maybe until 30 or 60 or 90 days after performing labor.”
To help keep costs down for contractors, Beam claims that it charges lower fees for transacting compared to say PayPal or Zelle, who also put caps on transaction amounts.
“That’s one of the many reasons why a lot of construction businesses still use paper checks,” Eagle said. “Because with every single payment, they’re losing anywhere from $15 to hundreds of dollars due to high fees that the payment networks charge.”
Recognizing that a good percentage of its clientele are native Spanish speakers, Beam built the first version of its product to include Spanish localization for non-native speakers.
Image Credits: Beam/Beam’s five-person team
Briq is an example of another fintech focused on the construction industry. Eagle believes Beam differs in that Briq is more focused on building tools for large enterprises to automate their billing process.
Long term, Beam aims to simplify payments for enterprise businesses as well.
Susa Ventures and Wischoff Ventures also participated in the seed funding, in addition to a group of angel investors that included founders and executives from several large and mid-sized fintech and construction businesses.
For Accel’s Saper, problems such as what Beam is trying to tackle have contributed to this nation’s housing shortage.
“It’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 invoicing touch so many other industries. However, construction-related billing has yet to have its renaissance.”
Beam, Saper added, tackles this problem with its “easy-to-use billing and compliance platform” that brings together “various parties in the Beam network to allow for seamless and prompt payments.”
“Long term, Beam will embed even more financial services into their platform,” she said.
Former Stripe engineer raises $4M for Beam, a fintech startup out to help contractors get paid faster by Mary Ann Azevedo originally published on TechCrunch