Kintsugi, a startup based in Silicon Valley, has successfully secured $18 million in funding, primarily led by Vertex, a prominent global provider of indirect tax solutions. This financial boost will enhance Kintsugi’s mission to empower small and medium-sized businesses with AI-driven tools for sales tax compliance and automation.
As e-commerce and cross-border trade continue to thrive amid increasingly complex tax laws, the demand for tax automation is escalating globally. Kintsugi’s innovative software seamlessly integrates with various revenue-generating platforms—such as Shopify, Stripe, Chargebee, and Quickbooks—allowing businesses to achieve a comprehensive understanding of their revenue and automatically calculate their tax liabilities.
CEO and co-founder Pujun Bhatnagar noted that Kintsugi aims to revolutionise tax compliance in a manner similar to how Uber transformed taxi services and Stripe improved credit card processing. Established in 2023, Kintsugi’s development was significantly influenced by a landmark 2018 Supreme Court ruling that enabled states to require online sellers to collect sales tax, irrespective of their physical presence. This ruling sparked a transformation in tax compliance for e-commerce platforms, prompting both established firms like Avalara and new players like Kintsugi to adopt AI technologies for a competitive edge.
Bhatnagar highlighted Kintsugi’s cost-effective solution, claiming it operates at half the expense of Avalara, effectively replacing the need for traditional Certified Public Accountants. Businesses can set up Kintsugi’s service in just seven clicks and find out their tax obligations in under three minutes, simplifying the tax filing process.
Kintsugi allows businesses to calculate their sales tax liabilities free of charge, charging only for the actual tax filing. They also offer an auto-remit option for automatic tax submissions once the data is processed from various revenue conduits. Last year, Kintsugi reported an annual revenue of $3 million, with aspirations to surpass $10 million by the end of 2025. The startup boasts an impressive 0.1% churn rate and serves around 2,400 clients ranging from nascent businesses to those generating up to $500 million in revenue.
Vertex’s partnership aligns with its focus on large enterprise clients but recognizes Kintsugi’s strength in serving smaller businesses. The investment includes a $15 million minority stake, alongside potential additional funding of up to $12 million for AI enhancement purposes, increasing Kintsugi’s valuation from $80 million to $150 million.
Looking ahead, Kintsugi, with a workforce of 95, intends to expand into South America, Africa, India, and China, while currently serving a client mix where SaaS companies comprise 45% of its customer base. Through its collaboration with Vertex, Kintsugi aims to broaden its reach across diverse sectors, leveraging their combined expertise in tax automation for businesses of all sizes.
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