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Lessons From Levelset's $500M Exit To Procore
Owen Drury
February 05, 2025 • Estimated Reading Time: 6 minutes
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INDUSTRY INSIGHTS
Lessons From Levelset's $500M Exit To Procore
When Procore acquired Levelset for $500 million in 2021, it marked a significant milestone in construction technology. But the story behind this exit offers valuable insights for anyone building technology solutions for the construction industry. Scott Wolfe, Levelset's founder, recently shared his journey from identifying a critical industry problem to creating a category-defining company.
Finding the Right Problem
It all started with a simple observation: getting paid in construction takes too long and creates too much stress. Scott noticed this while running a construction law practice in New Orleans after Hurricane Katrina. Instead of trying to revolutionise the industry with new technology, he focused on making existing processes better.
"We weren't going to these folks and saying, 'Hey, you need to digitize,'" Scott explains. "We were really stepping in as a substitute for something they were already doing."
This approach proved crucial to Levelset's success. Rather than forcing new processes, they enhanced familiar ones.
The Power of Helping First
Levelset's growth strategy centered on a simple principle: help first, sell later.
They created comprehensive resources for every payment-related challenge in construction, similar to how WebMD covers medical symptoms. This wasn't just content marketing – it was about becoming the industry authority on construction payments.
The company built an extensive knowledge base covering payment-related laws and processes for every state. When contractors faced payment issues, they found Levelset's resources through search engines. This organic approach generated thousands of leads monthly without aggressive sales tactics.
Smart Money and Smarter Growth
Despite being cashflow positive, Levelset chose to take venture capital.
But they did it differently.
Scott spent 16-36 months building relationships with potential investors before accepting funding. He chose investors based on alignment rather than valuation, often taking lower-valued term sheets from investors who better understood the vision.
"If I were to start something else," Scott notes, "one way you can really screw up is if you capitalize it wrong."
Each funding source – whether venture capital, private equity, or bootstrapping – shapes a company's trajectory differently. Understanding this impact proved crucial for Levelset's success.
Natural Growth Over Forced Expansion
From 2012 to 2015, Levelset grew naturally without external funding.
This period allowed them to develop their product, understand their market, and build a team that truly grasped the construction payment problem. When they finally took venture capital, they knew exactly how to use it.
The company developed multiple growth engines. Beyond their content strategy, they created a marketplace of information about construction projects and implemented product-led growth through document signing and processing features. Each addition solved real problems while expanding their footprint.
The Exit That Wasn't Planned
Scott never focused on selling the company. Instead, he concentrated on building value and solving industry problems. When Procore approached with an acquisition offer, he initially declined. It took multiple attempts and a compelling vision for the construction payments category to convince him.
The deal's success wasn't just about the price tag.
Scott considered the impact on all stakeholders – employees, customers, and investors. The final agreement included a $75 million stock package specifically for the team, recognizing their contribution to the company's success.
Key Takeaways for Construction Technology Entrepreneurs
The construction technology landscape continues to evolve, but several principles from Levelset's success remain relevant:
Solve existing problems better rather than forcing new processes
Build authority through genuine help and education
Choose investors based on alignment, not just valuation
Allow time for organic growth and deep market understanding
Focus on creating value rather than planning an exit
The Future of Construction Technology
Today, numerous companies are tackling construction payment challenges, each with their own approach. While they may differ from Scott's original vision, they're building on the foundation Levelset helped establish. The industry's transformation continues, driven by entrepreneurs who understand that successful construction technology isn't about digitisation for its own sake – it's about solving real problems in ways that make sense for the industry.
Remember Scott's central advice: "Focus on building value because that's going to serve all masters."
In construction technology, that means creating solutions that truly understand and address the industry's needs, rather than just adding technology for technology's sake.
Watch the full episode with Scott Wolfe here👇👇👇
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