Utah-based crypto tax and accounting startup TaxBit said on Thursday it had raised $130 million in its latest funding round led by IVP and Insight Partners, taking its valuation to $1.3 billion.
The three-year old company, founded by brothers Austin and Justin Woodward in 2018, plans to use the funds to deepen its data coverage and further develop its software.
The latest financing round also saw participation from 9Yards Capital, Sapphire Ventures, Madrona Venture Group and Anthony Pompliano. Previous investors including Tiger Global, Paradigm and others also increased their investment in the company.
Taxbit CEO said the fresh capital injection will be invested in the company’s enterprise tools as well as used to expand headcount after it opened a second headquarters in Seattle this summer.
Nikhil Sachdev, Managing Partner at Insight Partners, who will join the company as a board observer, said: “The tokenization of our global financial system is underway, and our current tax, accounting and ERP software infrastructure isn’t equipped to manage this shift. TaxBit has emerged as a leader in the industry and the platform helps everyone from consumers, exchanges and government to enterprises easily manage tax compliance and financial reporting on crypto transactions. We’re thrilled to be part of this next chapter of TaxBit’s rapid growth.”
This investment comes just five months after Taxbit raised $100 million in a Series A funding round. Since that time, the company says it has tripled headcount, deployed services with the IRS, and entered into partnerships with many crypto exchanges.
The investment round also comes in response to growing global demand for crypto services. As a result, the reporting obligations for cryptocurrency in the US continue to evolve at a breakneck pace, often lacking clear guidance from regulatory authorities. Most notably, the Internal Revenue Service has added a question to the standard 1040 form, America’s primary income tax form. The compliance measure comes in the form of a checkbox and asks taxpayers to disclose if they have ever dealt in cryptocurrencies in 2020.
Initially a consumer-facing product, TaxBit white-labeled software automates all aspects of crypto tax compliance for a mix of individuals, enterprises — such as crypto exchanges, wallet providers, lending and DeFi platforms. It also caters to local governments that are receiving bill payments in cryptocurrency.
TaxBit, which plans to expand outside the US, with the United Kingdom coming first, says it has processed more than 1 million tax forms to date.