TaxBit cofounders Justin Woodward and CEO Austin Woodward have raised $100 million to construct the ERP for cryptocurrency.
TaxBit
With bitcoin’s market capitalization approaching $1 trillion, and tons of of billions extra in worth in a bunch of different cash and initiatives, boring previous taxes have gotten an enormous headache—not only for shoppers, but in addition the exchanges, companies dabbling within the sector and governments getting concerned.
Whereas others speculate on the cash themselves within the new gold rush, entrepreneur Austin Woodward’s completely satisfied to offer the picks and shovels. His startup, TaxBit, automates all these positive factors and losses for the shoppers of exchanges and energy customers alike. And with Utah’s largest-ever Sequence A funding spherical within the bag, he’s on observe to construct a buzzy enterprise within the course of.
“The complete existence of this asset class that may be so disruptive to our monetary sector is in danger due to tax and accounting compliance at scale,” Woodward says. “There’s no NetSuite, Oracle or SAP of cryptocurrency.”
Based in 2018, TaxBit’s raised $100 million in its Sequence A financing, led by funding corporations Paradigm and Tiger World. PayPal Ventures, Winklevoss Capital, the funding agency of the billionaire Winklevoss twins, Coinbase Ventures and others, together with Invoice Ackman and Qualtrics cofounder Ryan Smith, joined the spherical, which takes the Utah-based startup’s whole funding raised to greater than $107 million.
Initially a consumer-facing product, in the present day TaxBit gives its software program to a mixture of particular person practitioners and, extra lucratively for the startup, the companies that assist them make investments and commerce: crypto exchanges, pockets suppliers, lending platforms and the like. TaxBit’s software program is white-labeled, which means that customers of these instruments will generally know they’re working within the startup’s software program, generally not, usually accessing it by means of the “tax middle” sections or pages of the businesses’ web sites. TaxBit has processed multiple million tax types thus far, the corporate says.
TaxBit bought its begin as Woodward and his brother, Justin, started to discover the rising crypto class whereas of their earlier jobs. Justin was working in a federal judicial clerkship whereas attending legislation faculty on the College of Chicago; Austin was spending nights researching and dabbling in crypto belongings whereas an early worker at Qualtrics, the client expertise firm that’s one among Utah’s latest tech breakouts. Austin Woodward says one formative second was when he was chargeable for Qualtrics’ lacking payroll in Australia as a result of he despatched a wire ten minutes late that took 48 hours to clear—an issue, he believed, that crypto might remedy, alongside others like transaction charges, cross-border funds and the flexibility for nonaccredited traders to purchase small items of belongings like actual property by means of tokens.
TaxBit cofounders Justin Woodward, Brandon Woodward and CEO Austin Woodward launched their startup from Justin and Austin’s dad’s basement.
TaxBit
When SAP purchased Qualtrics, in a shock transfer, for $8 billion simply days earlier than it was purported to go public in November 2018, Austin Woodward, who’d labored intently on its S-1 filings for that course of, noticed his cue to work on a tax answer in crypto full time. (Qualtrics finally went public, in any case, in a spinout this past January.) With their cousin Brandon Woodward targeted on front-end growth and design, the Woodward brothers moved into their dad’s basement; their father was additionally their first monetary supporter, chopping them an preliminary test to get going.
Quickly, Album Ventures backed TaxBit in a pre-seed spherical, and because the enterprise scaled to “many 1000’s” of particular person customers for its consumer-facing instrument, it raised a $5 million seed spherical in December 2019. In January, the enterprise arms of Coinbase and PayPal invested in a strategic spherical alongside its earlier investor, Winklevoss Capital. Scant weeks later, Paradigm, the crypto-focused enterprise fund founded by Sequoia veteran Matt Huang and Coinbase cofounder Fred Ehrsam, had come knocking, as did Tiger World, a number one progress fairness investor within the software program world.
“They carry a ton of vitality to fixing crypto tax,” says Huang. “For the pitch, the entire staff bought on a Zoom name on a Saturday night time, and Austin was nearly leaping by means of the Zoom display screen.”
Why elevate $100 million so quick? Austin Woodward, TaxBit’s CEO, says the cash is to spend money on the corporate’s enterprise instruments and worldwide growth, with the UK coming first. Ultimately TaxBit hopes to supply one thing like a standard enterprise useful resource planning instrument for firms, serving to them handle crypto transactions for optimum tax outcomes very like different software program instruments do for foreign currency echange. Governments—each the tax-collecting companies and municipalities that provide crypto as fee—might additionally show pure purchasers. Which means hiring from about 40 workers to greater than 100 by 12 months’s finish, Woodward says, and constructing out a gross sales and advertising and marketing staff that largely comprised the founders and vice chairman Michelle O’Connor, a veteran of crypto change Uphold, till now.
“We had been referred to as ‘the TurboTax of crypto’ actually early on this, and that was glamorous to us for what—two weeks?” Woodward says. “After which we realized we don’t need to be your instrument you log into on April 14 as a result of you need to, simply to file stuff.”
TaxBit’s story to this point reminds a minimum of one particular person of Qualtrics’ personal trajectory—its cofounder and chairman, Smith, now the owner of NBA franchise the Utah Jazz and an investor in TaxBit following the elevate. Just like the Woodwards, Smith constructed Qualtrics together with his brother and father from residence for years, solely elevating capital when the enterprise was well-launched. “That is my method of moving into crypto,” Smith says. “When constructing a startup like Qualtrics, you marvel how many individuals are paying consideration. Austin was positively paying consideration.”
