Construction payments platform IPEX appoints Paul Reid as CEO
IPEX, the industry-leading payments platform that protects project funds and offers enhanced payment security to the construction industry, have today announced the appointment of its first Chief Executive Officer, Paul Reid (pictured). Through the appointment, IPEX will double down on its mission to minimise the threat and damage of insolvency in Australia’s $360 billion construction industry.
Through its advanced payments platform, IPEX minimises the risk and reduces the contagion effect – non-payment of suppliers and subcontractors – associated with insolvency. IPEX manages over AUD$750 million in funds – on behalf of clients such as Bluescope, Frasers, MAB, Winim, Spyre Group, Fortis, INGWE Capital, Kervale and Nash Management – and is set to exceed AUD$1billion within Q2.
Under Reid’s leadership as Head of Strategy, IPEX has built a positive intent pipeline of over AUD$3 billion over the next 12-24 months and has seen the number of users grow to over 1,000 in the last 12 months.
“IPEX was created with a vision to change the way the construction industry thinks about risk, and restore trust in the process,” Reid commented. “The problems around payment security are well known but have largely been put in the ‘too hard to solve’ basket. Inevitably, everyone moves to protect their own interests which only compounds the issue. We’re here to fix the root cause. We’re under no illusions about the size of the task ahead of us, though, and we’re humbled, engaged and inspired by the opportunity to make a difference in an industry that adds so much to Australia, both economically and socially.”
Insolvency is higher in construction than in any other industry in Australia. According to the Australian Securities and Investments Commission (ASIC), 2,170 construction businesses entered administration in the 2022-23 financial year, 69% more than in 2021-22. Already in the new financial year, construction businesses are entering administration at record rates.
Reid’s strategy will focus on partnering with government bodies, developers and lenders. Through these allegiances, IPEX will provide the entire supply chain with the tools and financial education to reduce the instance of misappropriated funds and poor account keeping, and reduce the fallout of insolvency from lenders down to the 1.5 million subcontractors and tradies – who bare the greatest brunt – in Australia.
IPEX will also focus on research and development and platform innovation, and recently launched new features to improve access to builder entitlements.
“We’ll leave no stone unturned in that mission,” Reid added. “You can’t simply add one process to the builder and expect the issue to be solved. We’re securing the funds that flow through a project to the benefit of lenders, developers, suppliers and subcontractors. However, to fix the issue we must go further, by alleviating cash flow pressures on the builder. Achieving fund security creates an environment in which the builder payment model can change – this is critical to a sustainable industry.
“So we’re here to work alongside the entire industry. For developers and lenders, IPEX can provide more security, transparency and peace of mind with your money. For subcontractors and suppliers, IPEX can reduce the risk of non-payment in the event of insolvency. For builders, IPEX has the potential to support fairer commercial terms and remove the standard, risk-averse payment model that places them under cash flow pressures in the first place. There’s huge potential to create an industry that is built on greater trust, transparency and, most importantly, fairness for every stakeholder; and I’m hugely excited to make it happen with some of the most talented people in construction and technology.”
Commenting on the appointment of Paul Reid as CEO, IPEX Co-Founder, Chris Strode, added, “The growth of the company since Paul’s arrival has been significant, and now we’re ready to activate the next stage in our mission to tackle construction insolvency. There is no stronger candidate than Paul, a passionate and prominent figure in the industry. Elevating Paul to the role of CEO was a very easy decision, and one supported by the entire Board and team. His vision, not only for IPEX but the industry in Australia, is without parallel and we’re very excited at the prospect of that coming to fruition.”
The IPEX framework ring fences funds intended for a specific project, ensuring that progress payments can be used only to pay approved subcontractors and suppliers linked to that project. IPEX also provides developers with visibility over who has been paid and when, without requiring builders to share commercially sensitive information. Through IPEX, developers, lenders, subcontractors and suppliers receive greater trust and security over funds, and greater protection against insolvency and non-payment.
IPEX also strengthens the position of any financially secure builder, creating an environment in which many of the existing payment practices that put builders under significant financial stress are no longer required. This improves builder liquidity, from modified security requirements to provision of cash in advance for site establishment and certain supplier deposits.
