Autodesk moves into proptech with AEC deals

Autodesk announced last night that it will acquire partner company Payapps for an undisclosed amount. Payapps (aka GCPay in North America) makes a cloud-based solution that automates the payment process between general contractors and subcontractors. 

Financial terms were not announced, but we can guess at the scale. Payapps is an Australian company and local news coverage says that “Payapps raised $50 million [likely Australian Dollars, so US$33 million] in November 2020 with backing from IFM Investors and Aconex co-founder Leigh Jasper, and late last year the group secured £10.5 million … in venture growth investment from CIBC Innovation Banking.” That still doesn’t tell us what Autodesk paid, but it gives a sense that this wasn’t a tiny, technology-tuck-in-scale deal. 

In his blog about the acquisition, Autodesk’s SVP, Construction, Jim Lynch says, “By expanding the breadth of Autodesk Construction Cloud to include payment and compliance management, Autodesk will continue to build out an extensive Design and Make Platform and bring general contractors and subcontractors a new level of visibility during payment processes.”

That same Australian article also says that Autodesk participated in a $5 million (again likely AUS dollars) funding round for another Australian company, VAPAR, which works with water utilities in the UK, Australia, and New Zealand to apply artificial intelligence to understand video pipe inspection data. The funding will help VAPAR expand into the North American market, which one of the co-founders of VAPAR says spends “over half” of the “billions [that] are spent every year by water utilities on fixing their pipes.” Big potential market, therefore. Autodesk’s EVP AEC design solutions, Amy Bunszel, said, “This investment in VAPAR will help make its AI-powered technology more accessible, enabling utilities and municipalities across the globe to achieve more resilient infrastructure for their communities.”

Autodesk’s most recent blog about VAPAR says that Autodesk is integrating VAPAR AI image analysis into Info360 Asset to connecting inspection to capital project decision-making.

My take? Payapps brings Autodesk into “proptech” —property technology— a niche that wants to digitize paper-based (or inefficient Excel-based) workflows for an asset’s long 20-30-50-year life. Proptech is a darling of venture capital investors right now –the Center for Real Estate Technology and Innovation says investors poured over $50 billion into proptech since 2020– because the potential addressable market is just massive. How many large-ish buildings/plants/assets are out there that could benefit from this tech? And, in the case of Payapps/GCPay right now, how many construction projects? (Hint: LOTS.)

Payapps/GCPay also solves a real friction point in construction: submitting invoices and proving progress against milestones are things most contractors are not good at. That leads to cash flow problems and too many bankruptcies. And that leads to too much risk for the prime and the general contractors. There are other transaction management solutions on the market, to be sure. Still, this acquisition moves Autodesk further into its clients’ business workflows.

VAPAR is another form of proptech that moves Autodesk beyond design and into operations and capital decision-making. The application of AI to inspection imagery is a clear and useful use case of the technology — and is a great starting point for enterprises looking to get started with AI.

Autodesk’s financial year ends on 31 January, so we’ll hear from them in February with perhaps more info on the Payapps/GCPay deal.