The appetite of tax collectors to do their bidding has increased in the last few years due to the boom in the e-commerce market. There are more red tape and customs hoops for those shipping and receiving goods, as well as delays when there is a hitch. It has been bad news for the market.
Eurora, a startup out of Estonia that built an artificial intelligence-based system to help ease all of this along more smoothly in the EU region, is announcing $40 million in funding as it finds a lot of traction. In Europe alone, there will be more than 260 billion parcels delivered annually.
The Amsterdam based firm Connected Capital led the round, with previous backers Change Venture and Equity United also participating. The company only raised $3 million in four years. The round is one of the biggest Series A rounds for a startup out of Tallinn.
Eurora has been around since the beginning of the year, but it has come into its own in the wake of the Covid-19 epidemic.
The event that spurred a lot of its business has been that e-commerce, already on a growth trajectory, accelerated after 2020 due to that pandemic, and catching up to that, in the EU, regulators last July (2021) made a series of changes to how e
Goods are now taxed based on their final destination, not the point of import. This was done to make sure that funding was recovered where it was due, and also to create a more level playing field for domestic sellers in the EU.
The problem is that it has been a de-simplification of the previous system. Each country has different sales tax codes, and different items have different classifications, and now there is more paperwork for those sending and taking receipt of items to attend to, and usually more money to be collected. Delays and non-compliance that might catch up with those companies in the long term are all more complex.
Eurora's approach has been to build a platform that operates as a kind of artificial intelligence-based tax maven.
If you are buying online, the tax and duties are incorrect. Lastik said in an interview that their machine made sure it was right. This is a machine. You don't need to make sure every parcel is declared correctly.
The company says that it has worked with 22 scientists that have contributed to building its platform, which uses big data to help track and trace the origin of packages and make sense of how customs forms work. A customer can integrate with their other accounting and shipping software by way of an application programming interface.
It claims to be able to process 5,000 requests per second.
Connected Capital is excited to lead the investment into Eurora and support the team in scaling the platform globally. Regulators are pushing to improve transparency and reporting for the increasing number of goods entering through customs. We believe that Eurora has built a truly unique platform, which we believe improves compliance, reduces package delays, and lowers costs for e-commerce parcels shipped into Europe.
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