Beam, a business that has only been around for five months, has acquired $4 million in a venture fundraising round headed by Accel to make it easier for general contractors to pay their subcontractors and be paid themselves.
The company’s creator and primary investor have extensive experience working for the payments processing behemoth Stripe. Adam Eagle spent 5.5 years as a software developer with the fintech startup, creating essential APIs and infrastructure for Stripe billing, invoicing, commerce, and payments before establishing Beam in October 2022. Before becoming a partner at Accel in 2019, lead investor Amy Saper was instrumental in establishing and expanding Stripe’s product marketing staff.
Saper saw firsthand Eagle’s technical ability as a product marketing counterpart throughout the development of the Stripe billing and invoicing product. Therefore, when the time came to raise capital, Accel stepped up and led the round, which ended early this year.
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Beam – Created By Builders For Builders
Most contractors in the construction sector complain that they have to front the money for materials and labor to receive compensation for their work. Smaller businesses often need more cash flow and the time-consuming and labor-intensive task of keeping track of who owes what using spreadsheets and, at times, handwritten checks.
Beam, headquartered in San Francisco, aims to “streamline” the payment, invoicing, and receipting processes for small and medium-sized general home contractors. Furthermore, its app can accept ACH transfers. Eagle claims that contractors may sign up for Beam in “minutes” and begin making money immediately.
Leaving the realm of financial services to focus on construction technology may seem like a drastic move, but for Eagle, it was a natural one. Eagle claims he was “extremely interested” in architecture and houses before he began coding code.
The Need For Beam
According to Eagle’s market analysis, construction companies have “very onerous” finance procedures. He also understood that many of these companies are micro- or small-sized enterprises (SMEs) owned by families with only a few workers and limited expansion means. So, business owners must either invest substantial time and effort into handling these tasks themselves or shell out the cash necessary to employ a full-time bookkeeper or office manager.
“When you start thinking about the financial condition for these construction enterprises, you realize they are in fairly terrible circumstances,” Eagle said. “Many times they are waiting to be paid from the customer or have to pay big sums to subcontractors.” However, “if you’re a subcontractor, you have to spend a lot of money up advance for supplies and payroll, and then you could not be reimbursed until 30 or 60 or 90 days after providing work.”
Beam asserts that its transaction fees are cheaper than those of competitors like PayPal and Zelle, which also impose limits on the maximum amount that may be sent or received in a single transaction.
Eagle said this was one of the numerous reasons traditional paper checks were still widely used in the construction industry. As the payment networks demand such large costs, they lose anywhere from $15 to hundreds of dollars with each transaction.
Beam’s Spanish Beginnings
Beam’s original product was localized into Spanish for those who don’t speak Spanish as their first language since the company realized that a significant portion of its user base was Spanish speakers.
Briq is just one more construction-oriented financial solution. Compared to Beam, Eagle thinks Briq is better since it focuses on developing solutions to help big businesses automate invoicing.
In the long run, Beam hopes to streamline payments for large enterprises.
In addition to a network of angel investors that comprised the founders and executives of several major and medium-sized fintech and construction enterprises, Susa Ventures and Wischoff Ventures also contributed to the initial investment.
According to Accel’s Saper, the housing crisis in the United States has been exacerbated by issues similar to those that Beam is attempting to address.
She stated her opinion on the difficulty of construction on her blog. We’ve witnessed firsthand the ripple effects of developments in payment processing and invoice management as investors in fintech firms like Unit, Braintree, and Venmo. And the billing process in the construction industry has yet to see a similar revival.
According to Saper, Beam solves this issue by connecting “different partners in the Beam network to enable smooth and quick payments” through an “easy-to-use invoicing and compliance platform.”
“Beam will integrate even more monetary services onto their payment processing platform in the long run,” she said.
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Feature Image Source: Beam
