TaxBit today announced that it raised $130million in Series B funding, just five months after raising $100 million in Series A.With a valuation of $1.33 Billion, the latest financing officially makes Salt Lake City-based crypto tax and accounting software provider a unicorn. The total amount raised by startups now stands at $230 million. In 2017, brothers Austin Woodward and Brandon Woodward co-founded the company.IVP and Insight partners co-led Series B. This included participation from Tiger Global and Paradigm as well as Sapphire Ventures and Madrona Venture Group.Austin Woodward, CEO and co-founder of TaxBit, says that TaxBit connects digital assets transactions across exchanges so individuals can file their taxes more accurately, manage their portfolios, and make tax-optimized trading through its platform. It automates all aspects related to cryptocurrency tax compliance.The company has increased its headcount by about 100 employees since its March raise. It also opened a Seattle office, deployed IRS services, and formed partnerships with several digital asset platforms. It is connected to various exchanges like BlockFi, Coinbase and Gemini.As regulators demand more formal reporting, the digital economy's need for accounting and tax software is increasing. TaxBit's growth has been impressive. It issued more than 2 million tax forms in 2020. According to Austin Woodward, the company is on track for more than 50 million forms this year.Austin Woodward explained to TechCrunch that the digital asset market experienced a turning point during the pandemic. This led to a rapid push towards digital payments and other stores of value. The digital economy is rapidly becoming mainstream among traditional financial institutions as well as disruptors due to its rapid adoption.The crypto world can be very complicated. TaxBits products are designed by CPAs, tax attorneys, and provide tax filings and accounting services not only to financial institutions, but also to individuals, and governments, so that they can navigate these digital complexities more easily.These products include Tax Center Suites which is designed for end users. It automates back office accounting functions for finance departments. TaxBit Consumer is designed to simplify filing taxes on digital assets investments. Users are also provided with real-time direction insights that will optimize their tax liability throughout each year.The startup works closely with the IRS and other government agencies to offer tax calculation support and data analysis for digital assets taxpayers.Numerous financial institutions have begun to integrate TaxBits Tax Center Suite technology into their business, with the most recent being FTX USA.The company intends to use the new capital to expand its tax and accounting services across enterprise, government and consumer sectors. TaxBit plans to increase its workforce by doubling in the next few years and to continue opening new offices in the United States and United Kingdom. Austin Woodward stated that the company plans to expand globally in the long term with the U.K. and other jurisdictions on the horizon.The company's potential and offerings are being praised by its investors.General partner at IVP Tom Loverro believes TaxBit is at the right place at a right time. With the raise, he will be taking up a seat on TaxBit's board.Nearly every company that deals with crypto requires tax reporting software. He said that crypto tax reporting obligations will only get more stringent, as we all saw in the new legislation.Tax reporting is not only required for crypto-native businesses. Loverro said that every fintech or financial institution offering a crypto product must also report.He said that you should also consider the U.S. federal and state governments. There is also the buy side which includes both institutions and consumers. It is a rapidly growing and deceptively large market.Loverro continued by saying that the common refrain he hears in regards to crypto is "Why can't [incumbent] just include that as a feature?"Coinbase's former board observer, the investor can confirm that crypto is extremely complex and deep.Cryptography requires dedication and focus. Although buying and selling bitcoins one-time is not difficult from a tax standpoint, it can be complicated when you consider airdrops, stakes and DeFi. Loverro wanted to know. It's not difficult to get things complicated quickly.Nikhil Sachdev is the managing partner of Insight Partners. He points out that crypto has a market value of $1.5 trillion and is growing as new asset classes start transacting on Blockchains.Sachdev stated that our current tax, accounting, and ERP software infrastructure is not equipped to handle this shift. However, TaxBit has created a platform to help tax compliance financial reporting on cryptocurrency transactions across industries. TaxBit is the only scaled B2B solution for crypto taxes. It has already been awarded contracts with blue-chip logos.
