Autodesk agreed on Jan. 24 to acquire Payapps, a Melbourne, Australia-based provider of cloud-based payment management and construction compliance tools that is best known in the United States for its payment and compliance platform GCPay. Terms of the deal were not disclosed.
The acquisition comes just under two years after the two companies announced a strategic alliance and as the construction payments industry has become a more competitive market with cloud-based offerings such as the new Procore Pay service from Payapps and Procore competing for customers with Oracle Texture. cloud platform
“In construction, the payments process is often a manual process,” says Jim Lynch, senior vice president and general manager of Autodesk Construction Solutions. “With Payapps and GCPay, we felt this was the right time, if you think about the evolution of where we’ve taken Construction Cloud and Autodesk Build, to focus on preconstruction.”
Lynch noted that preconstruction is one of Autodesk’s areas of investment and that cost management is an important part of that process, and that the acquisition would ultimately strengthen Autodesk’s cost management capabilities. Lynch noted in his Autodesk blog announcing the deal that subcontractors can take an average of 83 days to get paid after starting work in the US, and because of the risk, many specialty and commercial contractors don’t will bid on a project if a general contractor or owner has a reputation for slow payments.
For Payapps, the payments market leader in the UK, Ireland, Australia and New Zealand and with GCPay in the US, the opportunity to join Autodesk’s cloud services business should offer growth opportunities .
“The one thing no one has been able to do is take a US product outside the US and successfully adopt it in construction payment management anywhere else,” says Geoff Tarrant, executive chairman and co-founder of Payapps. “Oracle has spent a lot of time, Procore has, but we don’t really see those buyers.”
Both Tarrant and Lynch said construction payments are evolving as both general contractors and large specialty contractors become more technologically savvy and demand more services. Lynch said even smaller contractors are looking for ways to compete with larger contractors’ payment cycles. Both Lynch and Tarrant said they don’t anticipate adding a solution-integrated banking partner to their services like Procore has done with LevelSet and Procore Pay.
“The challenge is, how realistic is it for everyone to have a Goldman Sachs account, and at some point the money has to flow out of that ecosystem,” Tarrant said.
Tarrant said GCPay will continue to offer customers the choice of whether or not to use electronic payments and its partnership with AvidExchange and its Fastpay technology will remain available.
