New Orleans-based Levelset closes on $30M in financing

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New Orleans-based Levelset recently closed on another round of financing to expand its services for cash flow management and payment to construction businesses.

Levelset, formerly known as zlien, provides software services for subcontractors, general contractors and suppliers that ensure these firms are paid in a timely manner. The company received $30 million of venture capital funding from Horizon Ventures, a venture capital firm based in Hong Kong that focuses on technology-based startups.

According to a survey of contractors by Levelset and T-Sheets by Quickbooks, more than half of contractors in the United States do not get paid on time, causing serious cash flow issues. Of those reporting payment issues, 67% are subcontractors and 30% are general contractors. Also, 51% of respondents deal with cash flow issues by using business savings and credit, while 34% use personal savings and credit.

The survey noted 42% of the 503 respondents were subcontractors, and 29% were general contractors.

Levelset CEO Scott Wolfe said payments and cash flow in the construction industry are still major issues, with the average time to receive payment around 83 days. Wolfe said payment speed with Levelset is somewhere in the 40-day range.

“Our vision is, we want that to be one day,” he said.

Wolfe said the current round of financing will be used for more research and development to improve his product and hire more employees. He estimated his firm, which is nearing 200 people in payroll, will hire around 100 workers in 2020.

The company, headquartered in the Lower Garden District, also has offices in Austin, Texas and Cairo, Egypt. Wolfe said construction firms in Texas, New York, California and Arizona use Levelset software. He added that he wants to continue growing the firm’s user base in the future.

The concept evolved in the years following Hurricane Katrina. Wolfe received his law license in 2005 and began working with construction industry clients soon after. Many were frustrated over cash flow and payments.

“There wasn’t really much help I could give them as an attorney in helping to get them paid,” he said.

Attracting venture capital to New Orleans has historically been a challenge to help local startups grow their business. But Michael Hecht, president and CEO of Greater New Orleans, Inc., said the takeaway from Levelset’s most recent round of financing is that venture capital will find great companies, no matter where they are located.

“The benefit of Levelset is now that they’ve been funded by a number of global venture capital firms; they’re helping to put New Orleans on the venture capital map.”

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