Information Technology
Autodesk Acquires Payapps, Maker of GCPay, to Compete in Payments
Acquisition of payments platform provider aligns Autodesk to compete with Procore and Oracle
Autodesk has acquired Payapps.
Illustration courtesy of Autodesk, Inc.
Autodesk agreed to acquire Payapps January 24, a Melbourne, Australia-based provider of cloud-based construction payment and compliance management tools that's best known in the U.S. for its GCPay payments and compliance platform. Terms of the deal were not disclosed.
The acquisition comes a little less than two years after the two companies announced a strategic alliance and as the construction payments sector has become a more competitive market with cloud-based offerings such as Payapps' and Procore's new Procore Pay service competing for customers with Oracle's Textura 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 that this was the right time, if you think of the evolution of where we've taken Construction Cloud and Autodesk Build, to focus on preconstruction."
Lynch noted preconstruction is one of Autodesk's investment areas and cost management is a big part of that process and the acquisition would ultimately make Autodesk's cost management capabilities stronger. Lynch noted in his Autodesk blog announcing the deal that it can take an average of 83 days for subcontractors to get paid after putting work in place in the U.S., and because of the risk, many specialty and trade contractors will not bid on a project if a general contractor or an owner has a reputation for slow payments.
For Payapps—a payments market leader in the U.K., Ireland, Australia and New Zealand and with GCPay in the U.S.—the opportunity to join Autodesk's cloud service business should bring it growth opportunities.
"The one thing that no one's been able to do is actually take a U.S .product outside of the U.S. and adopt it successfully in construction payment management anywhere else," says Geoff Tarrant, executive chairman and co-founder of Payapps. "Oracle's put a lot of time in, Procore has done so but we really don't see those buyers at all."
Both Tarrant and Lynch said that construction payments are evolving as both general contractors and large specialty contractors become more technologically savvy and demand more services. Lynch said even the smaller contractors are looking for ways to compete with the payment cycles of bigger contractors. Both Lynch and Tarrant said they do not envision adding a baked-into-the-solution banking partner to their services as Procore has done with LevelSet and Procore Pay.
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"The challenge there is, how realistic is it for everyone to have a Goldman Sachs account, and, at some point, the money has to flow outside of that ecosystem," Tarrant said.
Tarrant said GCPay will continue to give customers the choice as to whether they want to use electronic payments or not and its partnership with AvidExchange and its Fastpay technology would continue to be available.
