TaxWire raises $25M to automate global sales tax and VAT compliance for enterprises

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Hey, guys. Thank you for having me.

Thank you for on the show. Welcome.

Jord, great to see you. I know you guys know each other, but for the audience members that don't, maybe introduce yourself, tell us what you're building.

Yes. Uh uh Jordy, good to see you. I did not

did not have it on my bingo card three, four years ago, whatever, whatever it was that we I I worked for you, with you at uh at Party/Capital, that we would be talking about taxes on uh on your podcast. Um we're back. Uh we're we're so back. Congrats to to both of you on all the success. But uh but I'm I'm Andrew Ray. I'm one of the co-founders of of Tax Wire. We uh are a full managed solution for global sales tax compliance. And we just raised $25 million because death and taxes are forever. And uh I think I think that probably our bet is that Ryan Johnson will solve tax uh solve death first. So we're we're here to solve tax. I got I got the hat for

I see that. You're actually hoping that he solves that to just have more more

Exactly. Because the TAM just keeps keeps growing. We just have more consumption in the economy. GDP goes up. There's more taxes. Um hopefully we can improve the uh the subway system in New York with some of those tax dollars. And uh we just the good times keep rolling.

Why businessto business taxes? Why not go after Turbo tax?

Yes. Um it's a great question. Uh my my immediate uh initial reaction is because uh into it has a hell of a lot of distribution and so that's probably that's probably one. Um but no no more for for me specifically I had this problem in a really big way at a company I was at before this uh very much felt the pain of managing indirect tax compliance. Um and I think it's it's a market that's dominated by a bunch of companies that are very old. Um I think about $5 trillion in tax is remitted in sales tax and VAT by enterprises around the world. It's a very big problem. There's a bunch of very not so customer obsessed uh software companies and uh services firms like the like the big four etc that uh dominate this market and it's it's a painoint that uh I had before this and we uh so I it's mix of market opportunity and uh our customers um are finance people they're super smart but they do not have the expertise or time to be managing their their taxes. We we deliver deliver that outcome for them.

And reality check me reality check me on this. Uh I would assume that sales tax enforcement is increasing significantly. In the early days of the internet, there were all these crazy loopholes where if Amazon's based in Seattle and you buy something in Florida, they don't pay tax. And I think a lot of those loopholes have been closed. So more and more e-commerce companies have flourished on the back of Shopify and other platforms Stripe and but so there's more people selling uh products all nationally and so they have a much higher sales tax burden. Is that roughly correct for the secular trend?

Rough roughly correct. The secular trend is is kind of like a few things. One is regulation. So there's that regulation has been rolling out and what we're seeing now is that uh a lot of um states are now actually starting to roll out taxes of not only like more enforcement, they're using AI to do to do audits. Um a lot of states are increasing sales tax as well and trying to increase audits of companies that have been complying now because they're getting squeezed on income tax.

They're getting squeezed on property tax. Gavin Gavin Newsome in in California is trying to start taxing the software industry. And then very similarly in in VAT around the world, there's a lot of uh enforcement of um of real-time reporting and invoicing that's coming down the pipeline. So it's uh it's a nobody gets voted out of office for raising sales tax or raising VAT whereas income tax or property tax can can hit you. So you're you're seeing big enforcement that that's like just a I'd say a second or tailwind. And then the the incumbents in the industry are not incredibly native or customer friendly. And so you've also kind of got this general customer frustration that that gives a a new player like us a lot of tailwinds as well.

So you raised this money during the SAS apocalypse. You overpowered the SAS apocalypse, but I'm sure you were getting asked like you know how like how did you answer how did you answer the SAS apocalypse question? Because now right I'm sure when you kind of close around or at least you had a term sheet signed the SAS apocalypse was over. Everyone was like, you know, uh, we're back. But, but how how

we were super back. Super back. The SAS SAS apocalypse is over. But no, I I think it's super being super honest. It's like we the benefit we're we're we're benefiting a little bit from the fact that um a lot of the people we compete with are services as much as they are software companies. And so that there's like more spend to eat which lets you kind of um lean into we we get we are categorized as like AI native SAS or AI native services software. And and some of that is that we genuinely like are actually delivering an outcome. And so our customers don't think of us as software or services. Like we have tax experts in house. Um we do literally everything that goes into interact tax compliance. We we ripped and replaced something for consulting firm literally this this week for for one of our customers. Um and so it's it's so some some of it is that we are we are benefiting from AI versus being someone who's being displaced maybe by AI. And so it's mostly a tail end. I I think

you're doing the displacement. You're coming after You're coming after the the hundreds of thousands.

I am the apocalypse.

Exactly. We are We are the We are the apocalypse and we we probably we probably our category probably benefits from it, which is uh something that maybe uh I can't take much much credit for. I think I think it's probably still painful out there for for some folks in in a way that maybe it's not been for us.

Well, good luck. Thank you so much for

amazing progress. It's been awesome to see the journey and uh yeah, congrats to the whole team on the milestone. I'm sure you'll be back soon.

We'll talk to you soon.

Of course. Thank you guys so much. We appreciate it.

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