Addressing the Construction Industry's Payment Delays: Adaptive's Solution

The construction industry faces a significant challenge with slow payments, taking an average of two to three months for companies to receive funds. Contributing factors include project delays, multiple payment layers, and cost overruns, resulting in sluggish payments that cost the industry $273 billion in 2023, accounting for 14% of total project expenditures.

Identifying back-office inefficiencies as the root cause, Matthew Calvano, Henry Bradlow, and Francisco Enriquez founded Adaptive in 2021. This platform aims to streamline payments and accounting processes for general construction contractors. Calvano explains, "The construction payment chain is intricate, involving banks, developers, general contractors, and subcontractors. This complexity, coupled with the fact that most construction companies are SMBs lacking financial expertise, drives the industry's slow payments."

Adaptive recently secured a $19 million Series A funding round led by Emergence Capital. The platform offers various workflow automations for financial management, including budgeting, expense tracking, accounts payable, and electronic payments. Adaptive allows customers to upload documents such as insurance agreements and payment requests in formats like SMS and PDF, utilizing automations to handle approvals and budgeting tasks. "We've built several generative AI algorithms to automate the financial management and bookkeeping workflows unique to construction," says Calvano. "Our main competitor is the manual labor involved in managing finances, traditionally supported by email, Excel, file sharing, and legacy project management software."

Adaptive faces competition from companies like Briq, which offers similar financial workflow automation, Beam, a fintech focused on streamlining payments and invoices for contractors, and MakersHub, which deciphers accounts payable data for construction firms. Despite this, Adaptive has established a robust business, serving over 280 construction companies, including custom homebuilders, commercial general contractors, and real estate developers.