"The number one problem that we wanted to solve in 2022 was lien rights management," Courtemanche says. "It's a priority for Procore to finish these complex workflows for our customers. So, definitely we are going to be looking at what the most expeditious route is here, but we also have to remember, we're serving the small-to-medium business, the mid-market in the enterprise, we're serving owners, general contractors and specialty contractors."

Tackling Payment Problems

Management consultant PricewaterhouseCoopers said in a report that it takes an average of 83 days for payment to reach contractors after invoicing. Courtemanche says that ever since Procore began adding financials to its platform in 2017, he knew the many stakeholders and processes involved in construction would pose a challenge for creating effective products for contractors.

Courtemanche says the workflows involved were long and complicated because they crossed so many different stakeholders from bidding to estimating to change orders and that contracting instruments such as G702 and G703 documents for invoicing and scheduling already had established processes built around them. Compliance is also intertwined with bidding and payments, he adds.

Levelset has been working on the many problems that plague payments in construction since 2012 when it was founded in New Orleans by CEO Scott Wolfe. A particular pain point that Levelset sought to address with a novel approach was a review platform for subcontractors that provides company profiles that rate general contractors and owners as slow, medium or fast payers.

"This is a really complicated, manual area that contractors, vendors, suppliers, general contractors, owners—they all struggle with it. We've been beating that drum for years and succeeding at modernizing it for thousands of companies," Wolfe says.

Both Wolfe and Courtemanche say it will take new approaches and processes to address modernizing construction payments. Courtemanche says Levelset will operate largely the same as it has an independent company until more development and integration into Procore's platform can be built in 2022. Levelset was already an application partner of Procore.

"If you think about Procore's mission of connecting all the stakeholders on a global platform, one of the things that's interesting about lien rights is they actually do connect the stakeholders, it connects them in risk," Wolfe says. "We've had to build our platform from the beginning, thinking about how do we connect all the different stakeholders, because the only way to modernize lien rights in our view is to get all the stakeholders to be connected and exchange this information on a modern platform."

Courtemanche says the acquisition will also give Procore access to industry data, including payments and compliance activity, allowing it to deliver risk intelligence to our customers, and to develop more financial products. He also says that combining Procore and Levelset's customer data will allow the combined company to provide analysis of individual user performance and industrywide risk trends.

What the Data Tells You

"Data really does help you assess risk because you can actually get down to to the lowest detail to understand where risk really occurs and where it doesn't," Courtemanche says. "I think we just have a better view of risk than most folks out there."

He says that Procore's data graph, already used by the Associated General Contractors of America and other organizations to track construction trends, and the Levelset data graph with its risk and payment information will make a powerful combination of data from which artificial intelligence and machine-learning algorithms can predict trends and outcomes.

"There's nothing more exciting for machine learning engineers and data scientists to look at," Courtemanche says. "I just had the opportunity to meet with Levelset's teams and they also have a very, very strong data team on their side."

Breaking New Ground

It's a busy time for Procore, as the company will again be holding its Groundbreak Conference Oct. 12-14 virtually. Both Courtemanche and senior vice president of product Wyatt Jenkins said that the company's IPO has allowed it to invest in acquisitions and enhancements to its platform. Several new enhancements to Procore's platform have already been announced ahead of the virtual conference such as a new, collaborative document management tool with integrated markup and specific construction workflows. Procore also expanded its infrastructure with 11 new data centers. There are now 15 data centers in total that allow customers to store project data locally in Procore's network.

"Our workflow engine works on any tool in Procore, whether it's documents or files or invoices, wherever you go in Procore, whatever tool you're using, you can just dip down into the workflow engine, click onto it and a little sidebar comes up and it shows a diagram of a workflow," Jenkins says. "If you want it to go to this person or this person to approve things, you can, and now you've created a workflow."

Jenkins adds that the company's biggest competitor is still spreadsheets and ink-on-paper and he, Courtemanche and Wolfe all say the challenge of digitizing construction workflows is still a challenge the construction platform provider is committed to solving.