Kintsugi, a startup based in Silicon Valley, has successfully secured $18 million in funding, spearheaded by Vertex, a prominent provider of indirect tax technology. This funding will assist Kintsugi in expanding its AI-driven sales tax compliance services aimed at small and medium enterprises, enabling them to streamline tax calculations and filings.
The rapid expansion of e-commerce and international trade alongside complex tax regulations has amplified the need for automated tax solutions. Kintsugi’s software seamlessly integrates with popular platforms such as Shopify, Stripe, and QuickBooks, offering businesses a comprehensive view of their revenue and facilitating immediate tax calculations.
Pujun Bhatnagar, Kintsugi’s co-founder and CEO, likens their mission to revolutionising compliance processes similar to how Uber transformed the taxi industry and Stripe did for payment systems. Established in 2023, Kintsugi emerged in response to a significant 2018 Supreme Court ruling that mandated online sellers to collect sales tax, irrespective of their physical presence in the state. This ruling has been transformative for e-commerce and has led to increased tax collection for states. While established tax compliance firms like Avalara have benefitted from the changes, Kintsugi aims to leverage AI to capture a share of this evolving market.
Bhatnagar claims that Kintsugi offers a more cost-effective solution compared to Avalara and eliminates the need for a Certified Public Accountant (CPA). Users can install the app in seven clicks and three minutes and receive instant information about their sales tax liabilities, with monthly filing taking less than three minutes.
Kintsugi allows businesses to calculate their sales tax obligations for free, charging only for the filing service. Businesses can also opt for automatic filing once the tax data is collected from various revenue streams. The company reported annual revenues of $3 million last year and has set an ambitious goal to exceed $10 million by 2025, boasting a low churn rate of just 0.1% and a growing clientele of around 2,400 companies.
Vertex’s investment brings added value to Kintsugi, especially as they focus on catering to smaller businesses, a demographic Vertex has yet to fully engage. The partnership, which includes a $15 million minority stake in Kintsugi, will facilitate shared intellectual property and a revenue-sharing model. Kintsugi’s valuation has climbed from $80 million in November to $150 million post-funding.
Besides the initial investment, Vertex has pledged an additional $10 to $12 million for AI development, integrating Kintsugi’s innovations into its offerings. Kintsugi is currently exploring markets in South America, Africa, and Asia, including India and China. With 45% of its customers coming from the SaaS sector, generating millions of transactions, Kintsugi’s collaboration with Vertex is poised to enhance its market presence across diverse industries.
Fanpage: TechArena.au
Watch more about AI – Artificial Intelligence
