Louise Stewart Builds ProjectPay To Ensure Subcontractors Succeed

Louise Stewart started ProjectPay in 2017 in Perth Australia to provide a digital payment system for the construction industry that all-too-often left subcontractors struggling to survive because they were last in line to get paid. This founder’s journey is based on my interview with her.

Stewart knows the challenges subcontractors face in the construction payment supply-chain firsthand. She decided to try and solve the problem when her husband’s small construction business was never paid for work he did for a general contractor’s building project funded by the Australian government.

While her husband’s situation was egregious, she found out that the payment problem was systemic to the industry. With Australia’s large construction companies wielding political leverage to prevent changes to an outdated and sometimes corrupt process, Stewart became Chairman of the Australian Subcontractors Association to try and effect change within the industry.

In that role, she represented over 200 subcontractors in a large builder collapse in an attempt to recover as much of the $20 million in payments that had not been passed on to them. “Unfortunately I failed, I was misled and I learnt fast about the insolvency administration process that enables directors of large building companies to not be held liable for the debts incurred by subcontractors. The director of that building company kept his 10 investment properties, yet subcontractors have still not seen a cent of the money that was owed to them, some were at risk of losing their family home. It is what continues to drive me. I will not fail these small businesses again,” says Stewart.

The problems associated with late payment for subcontractors is not unique to Australia. A study reported in The Journal of Legal Affairs and Dispute Resolution in Engineering and Construction points to the “increasing global trend of late payment and nonpayment” for subcontractors, who are mainly small and medium sized businesses.

In her mission to see these subcontractors succeed, she founded and bootstrapped the creation of a digital platform that serves to pay subcontractors immediately for their work. With ProjectPay, payments and retentions are held in project trust accounts with a government-authorised bank that makes sure these funds are protected against delayed payment or non-payment as a result of business failures, liquidation and bankruptcy. Once project invoices are approved for payment, subcontractors can request immediate payment and funds will be made available within hours. According to Stewart, it is the only platform to link the payment application process (invoices/claims) to payments.

Stewart was already an experienced entrepreneur, having built and successfully exited a business in the healthcare industry. But she didn’t realise just how difficult it would be to change an industry with an entrenched culture and way of doing business. “Being a female founder, I knew I was climbing a mountain when setting out to solve this problem. I didn’t realise it was Everest at the time. In Australia, my gender was an issue. And then I also came up against political corruption as well, says Stewart

She believes politics also came into play when the bank she was dealing with as her payment partner suddenly dropped her business because she ran as an independent against the party in power that had a cozy relationship with the bank. “So at that point, I was like, I’m pretty much done with how this is working in Australia. And the UK Government had already approached me through the global entrepreneur program and said, ‘Hey, we’d like to help you relocate to the UK, “says Stewart whose business received over a $1 million in grants. While PayProject still maintains a presence in Australia, its main office is now in London.

According to Stewart, the construction industry is a buy now pay later business, without the proper controls to make sure that pay later happens. So typically, it’s the small businesses that are providing free credit on projects. But the problem is, these small businesses are not being given any opportunity to credit check that the owner has the ability to pay pay for the project, they have no control over whether the prime contractor will pass on timely payment to them. Yet, they’re expected to carry the cost of delivering the project and using a whole host of inappropriate finance products to do so, which exposes them to incredible risk and the potential for financial losses.

Stewart believes she is providing a much needed service for a $15 trillion global contraction business, and with a $100 billion payment market opportunity in the US alone, ProjectPay now has expanded its presence in the US to California, New York, Maryland, Texas and Delaware.

“ProjectPay has created an environment where more small business contractors can bid and win public project contracts, resulting in lower costs for contracted services for cities and promoting participation from small, diversely-owned businesses on public projects, aligning with the cities’ supplier diversity goals,” says Stewart

Stewart was born in Papa New Guinea but grew up in a small mining town near Perth Australia. “Both of my parents worked full time. And so I guess you could say I sort of grew up wearing hard hats, because I spent a lot of time at my dad’s office, and he was the general manager of the Caterpillar dealer in the town,” says Stewart.

Her dad was her role model. “He had this very shy daughter with this absolutely steely determination. And so he really nurtured my independence and my fearless nature. And so, I really grew up believing I could be whatever I wanted to be,” says Stewart.

She moved to Perth to go to University and later got a job in advertising in 1997, but she was obsessed with learning about the Internet, which was barely available in Western Australia at the time. At 21, she wanted to learn about the wider world and spent time traveling around the US, then later moved to London to work for Axciom, where she was involved in data marketing and e-commerce. “Unfortunately, I missed my family. And so I ended up heading back to Perth, which was like being in a parallel universe,” says Stewart

She left Perth for Sydney to escape the region’s prevailing perspective that women could not be successful in sales or executive positions. While attitudes towards women in the workforce weren’t much better in Sydney, she did get a job with Experian where she then became senior sales manager and later moving to Xpedite (Now Premier Global Services), where she became Group Sales Manager. She became an entrepreneur in 2004 when she launched Revive Clinics, an online service that employed over 100 nurse practitioners to provide a centralised booking, patient record and Medicare integrated platform used by thousands of pharmacies to manage their flu vaccination programs. She sold that business in 2015 and planned to use the proceeds to “retire” at home to spend time with her family.

But her sense of justice demanded that she try to right the wrongs in the construction business when her husband’s company was never paid for work done for a general contractor. She first entered politics to see if she could change construction payment policy from the inside and in 2017 decided to use her entrepreneurial and technology skills to change the industry in Australia and, indeed the world, with the creation of ProjectPay.

As for the future? Stewart plans to move to San Francisco in July to provide more focus on her largest market opportunity. “We know we are building a very big global business. And so it takes time to build a robust, large business. But we’ve really reached that pivotal point where embedding debt into our protected payment process really does change the game,” concludes Stewart