Escrow Service gets the Green Light
GreenLight Escrow is revolutionising the way tradespeople and homeowners conduct business transactions, providing a secure and innovative platform.
Cofounder Max Semmons-Russell’s determination and industry expertise led to the platform’s successful launch in May 2023. In just three months, the platform has already appealed to 70 users, 40 of which are verified and able to hold transactions.
Semmons-Russell has been hard at work, diligently refining the platform to tailor it to the trade sector, ensuring that it truly embodies the spirit of “for tradies by tradies.”
“We provide an escrow option for tradies and homeowners. As a homeowner, if you pay a deposit to a tradie or someone that’s doing work for you, once you hand it over, it’s in their hands and you don’t know where it’s really going.
“We can provide an option where [the money] is safely kept in the middle. The homeowner has clarity on where exactly the money is, but also for the tradesperson.”
The service is open to other sectors including engineering, law and e-commerce.
According to Xero, late payments cost Kiwi small businesses $456 million per year. Almost half of all invoices owed to small businesses in 2021 were paid late and eight percent paid more than a month overdue.
“I am super confident that it’s going to take off because I know it’s a huge problem. We’ve got a pretty good offering at the moment, but I’ve got a ton of ideas on how to make it heaps better.
“People are already using it and loving it. I am using it and loving it.”
Late payment issues became apparent to Semmons-Russell when he established his own plumbing company, KPA, five years ago. He realised that the problem he encountered is widespread across the entire industry, affecting businesses nationwide.
“Either tradies weren’t getting paid, or homeowners were being let down. An option like this just gives a bit of peace of mind.”
He says most jobs have no issues, but there’s that five to ten percent that can get “a little tricky”.
“But even the ones that go well, I’d say between 60 and 80 percent of them are paid late. It seems to be getting worse every month this year.”
How can GreenLight Escrow solve the problem? Both parties agree on a price for the job, and the customer deposits the money onto the platform. Both parties can now see the money in the escrow account. The job gets done or the item is delivered, and the customer confirms the work has been done or the item delivered. Finally, GreenLight Escrow releases the payment.
You can dice it up as many different ways as you want. If there’s variations on the job, you just add another milestone for the variation. It’s up to our customers how they like to do it. But we can help them with basic tips on how to do it,” says Semmons-Russell.
Over the last two years, Semmons-Russell has worked in his plumbing business while also trying to bring his escrow idea to life. Even though he faced numerous hurdles that almost made him quit, his determination prevailed, and he successfully transformed his vision into reality.
“There were legal requirements and heaps of technical stuff we had to overcome first before we could even finish building the platform. I started building it first then had to build the end of it around the law in New Zealand.”
That’s the part Semmons-Russell is proud of the most.
“My cofounder Adam Jennings, he’s a bit of a smarty. He just finished a masters in commercial law. He and his professors at the University of Auckland helped me with [the legal aspect]. So I am really proud that all our legal side of things is really rock solid.”
With $200,000 investment, coupled with strategic partnerships and plans for expansion, GreenLight Escrow’s ambition for growth and widespread adoption is evident.
$50,000 of the total investment came from a family friend; $12,000 was invested through Kōkiri, a business accelerator programme focused on Māori businesses in tech; another $50,000 to $100,000 will be funded from other sources. The rest came out of Semmons-Russell’s own pocket.
Semmons-Russell says other escrow services are different from GreenLight. Some, for example, require customers to pay an online subscription fee, while others operate using a non-software method.
“We’re a software. With us, you just make a login, you put your password and you’re in. We cover all the cost to get you verified and then you only have to pay for our service when you make a transaction.”
Semmons-Russell plans on setting up partnerships with job management software companies like Fergus, Tradify and Hnry to add value to their current platforms, as they don’t offer an escrow option. His aim is for the business to reach 500 customers by the end of this year.
Over the past six years, Semmons-Russell has made remarkable progress in his business journey. Along the way, he learned two valuable takeaways: the importance of surrounding himself with the right people, and maintaining an open-minded approach. These insights have played a pivotal role in his growth and success.
“Six years ago, I didn’t even know what GST was. I was a really good plumber, but I didn’t know bugger-all about business. Luckily I had heaps of my mates who had already been in business for a while.”
His advice for anyone thinking about starting a business? “Just figure out a way to do it and just do it and stick with it.”
As GreenLight Escrow continues to gain momentum, it aims to reshape the industry, offering a reliable and user-friendly platform for secure transactions.
Story by Mina Amso