Kintsugi Secures $18M, Valuation Doubles for AI Sales Tax Startup

Kintsugi Raises $18M, Valuation Doubles for AI Sales Tax Automation

Kintsugi, a Silicon Valley-based startup specializing in AI-powered sales tax automation, has secured $18 million in new funding. The round was led by Vertex, a global provider of indirect tax technology solutions. This investment boosts Kintsugi's valuation to $150 million, double its value from just six months prior.

The company plans to use the funding to expand its AI-powered tax calculation and filing capabilities to more small and medium-sized businesses (SMBs). The increasing complexity of tax regulations, coupled with the growth of e-commerce and cross-border trade, has created a significant demand for automated tax solutions.

Simplifying Sales Tax Compliance for SMBs

Kintsugi's software integrates with popular platforms like Shopify, Stripe, Chargebee, QuickBooks, and custom APIs. This provides a comprehensive view of revenue, enabling the startup to calculate taxes instantly. The platform aims to simplify sales tax compliance, making it accessible to businesses of all sizes.

Our goal is to do for tax compliance what Uber did for taxis and Stripe did for credit card payments. We want to simplify compliance in 171 countries.

— Pujun Bhatnagar, Co-founder and CEO of Kintsugi

Founded in 2023, Kintsugi recognizes the impact of the 2018 Supreme Court ruling that allows states to collect sales tax from online sellers, even without a physical presence. This ruling significantly impacted e-commerce businesses and fueled the growth of automated tax compliance solutions.

Cost-Effective and Efficient Tax Filing

Kintsugi offers free sales tax liability calculations and charges for tax filing. It also provides an auto-remit option for automated filing. The startup claims to be significantly more affordable than competitors like Avalara, while also eliminating the need for a Certified Public Accountant (CPA) for many businesses.

With a low churn rate of 0.1%, Kintsugi boasts a diverse customer base of 2,400 businesses, ranging from pre-revenue startups to companies generating hundreds of millions in revenue.

Strategic Partnership with Vertex

Vertex's investment in Kintsugi complements its existing focus on large enterprise and complex mid-market businesses. The partnership includes a $15 million minority investment, IP sharing, and a revenue-sharing commercial partnership.

Vertex plans to invest an additional $10-$12 million in Kintsugi this year to leverage its AI technology. This collaboration will enable both companies to expand their reach and offer innovative solutions to a wider range of businesses.

Kintsugi, with its 95 employees, plans to expand its services globally, targeting South America, Africa, India, and China. The startup's strong profit margins and strategic partnership with Vertex position it for continued growth in the rapidly evolving landscape of sales tax automation.