Adaptive Builds: Streamlining Construction Payments with Automated Tools

The construction industry is grappling with a significant slow payments issue. Recent studies indicate that construction companies face an average wait time of two to three months for payment, often due to delays, multiple payment tiers, and unexpected cost overruns. In 2023 alone, the cost of these delayed construction contract payments soared to $273 billion, accounting for 14% of the total project expenditures that year.

To address this challenge, Matthew Calvano, along with co-founders Henry Bradlow and Francisco Enriquez, identified back-office inefficiencies as a key culprit. In 2021, they launched Adaptive, a platform designed to streamline payments and accounting specifically for general construction contractors. “The construction payment chain is complex, involving banks, developers, general contractors, and subcontractors,” Calvano explained. “We believe this tangled web, along with the fact that many construction companies are small- and medium-sized businesses (SMBs) lacking financial expertise, primarily drives the industry’s slow payment rates.”

This week, Adaptive secured a $19 million Series A funding round led by Emergence Capital. The platform offers a wide range of workflow automation tools for financial management, including budgeting, expense tracking, accounts payable, and electronic payments. With Adaptive’s solution, customers can easily upload important documents like insurance agreements and payment requests in various formats, such as SMS and PDF, and utilize automation to handle these uploads—like approving requests and budgets.

“We’ve developed several generative AI algorithms to automate the unique financial management and bookkeeping workflows in construction,” Calvano noted. “Our main competition lies in the manual processes typically required for financial management, which are largely reliant on email, Excel, file sharing, and outdated project management software.”

Adaptive faces competition from companies like Briq, which offers similar financial workflow automation; Beam, a fintech focused on streamlining payments, invoices, and receipts for contractors; and MakersHub, which specializes in analyzing accounts payable data for construction firms.

However, Adaptive appears to be thriving, with over 280 construction companies on its client roster, including custom homebuilders, commercial general contractors, and real estate developers.

Looking ahead, Calvano shared that Adaptive plans to focus on acquiring subcontractor clients by creating tailored products for this segment. In the medium term, the company—currently generating all its revenue through software—intends to explore monetizing additional integrated functions like payments, insurance, and payroll. “By managing our customers’ entire financial workflows, we see many opportunities for embedded finance, especially aimed at SMBs that often lack comprehensive financial services,” he stated.

Investors in Adaptive’s Series A round also include Andreessen Horowitz, Definition, Exponent, 3kvc, Box Group, and Gokul Rajaram, bringing the startup's total funding to $26.4 million. A portion of this funding will be allocated to expanding Adaptive’s New York-based team from 29 to 45 employees by year’s end.