Vertex's $15M Investment Elevates Kintsugi To $150M Valuation–The Startup Aims To Simplify Tax Compliance For SMBs Worldwide

Kintsugi, a San Francisco-based AI-driven tax compliance startup, has secured $18 million in new funding, doubling its valuation to $150 million within six months.

The funding round was led by Vertex VERX, a global provider of indirect tax technology solutions, which invested $15 million for a 10% ownership stake. According to the company's statement released last week, the partnership includes IP sharing and a commercial arrangement, with Vertex joining Kintsugi’s board of directors.

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AI-Powered Tax Compliance for SMBs

Founded in 2023 by CEO Pujun Bhatnagar and chief of technology Jeff Gibson, Kintsugi offers an AI-powered platform designed to automate sales tax compliance for small and medium-sized businesses.

The platform integrates with popular revenue sources like Shopify SHOP, Stripe, Chargebee, and QuickBooks, enabling real-time data ingestion and instant tax liability calculations. Businesses can calculate their sales tax liability for free, with charges applied for tax filing services. An auto-remit feature allows for full automation of the filing process, TechCrunch reports.

According to the company, Kintsugi’s solution reduces preparation time by 75% and compliance costs by 50% for e-commerce and SaaS businesses. The startup boasts a 0.1% churn rate and has a customer base of 2,400 companies, ranging from pre-revenue startups to enterprises generating up to $500 million in revenue. In 2024, Kintsugi generated $3 million in annual revenue and aims to surpass $10 million by the end of this year, TechCrunch reported.

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Kintsugi's Strategic Partnership with Vertex

Vertex’s investment in Kintsugi complements its focus on large enterprise multinational companies and complex mid market businesses. “Kintsugi brings innovative AI-enabled capabilities to address the needs of the indirect tax market in new and creative ways,” said Chirag Patel, Vertex’s chief strategy officer, in a company statement last week. “Through the IP sharing agreement, this investment will help accelerate our AI roadmap to deliver new innovations for our mid-market and enterprise customers globally.”

In addition to the $15 million investment, TechCrunch reports that Vertex has committed to investing $10 million to $12 million in AI advancements, leveraging Kintsugi’s intellectual property to enhance its own AI-focused developments. This strategic move allows Vertex to expand its reach into the SMB market while supporting innovation in tax automation, the company said in its statement last week.

Global Expansion and Future Outlook

According to TechCrunch, Kintsugi has already expanded its operations from the U.S. to Canada and Europe and plans to go live in South America, Africa, and the Eastern world, including India and China. Currently, SaaS companies comprise 45% of Kintsugi’s customer base, accounting for 5.5 million transactions valued at $7.7 billion.

With over 93% profit margins and a growing customer base, says TechCrunch, Kintsugi is well-positioned to become a leader in the tax compliance technology landscape. The partnership with Vertex provides Kintsugi with financial backing and strategic support to accelerate its mission to make tax compliance painless and accessible for growing businesses.

As digital commerce continues to evolve and tax regulations become increasingly complex, Kintsugi’s AI-driven platform aims to offer a streamlined, automated solution for businesses navigating the intricate world of sales tax compliance.

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