In theory, paying sales tax should be an easy task. In reality, it’s tedious, time-consuming, and one of the most complicated types of tax that businesses have to comply with.
To make matters worse, regardless of whether it’s a startup, scale-up, or enterprise company, compliance only gets more complex the more customers and sales a business attracts across state lines.
Helping businesses overcome this challenge, fintech startup Kintsugi AI announced today a $6m funding round (at $40m valuation) for its tax automation platform.
The series A funding round at Kintsugi AI was led by Link Ventures with participation from Venture Highway, KyberKnight, Plug and Play and DeVC along with a lineup of notable angel investors.
The team will use the fresh funds to drive Kintsugi AI’s development of automated VAT solutions for Canada and Europe, supporting customers selling internationally.
“We are hyper-focused on helping more than 27M ecommerce and SaaS businesses worldwide save time and money by putting their sales tax on autopilot,” said Pujun Bhatnagar, CEO and co-founder of Kintsugi AI.
“Tax complexity is only increasing, and without the right tools, manual processes will inevitably fail to scale. That’s where Kintsugi comes in.”
Kintsugi was founded by Stanford graduate and former Facebook machine learning engineer Pujun Bhatnagar, ex-Credit Suisse and Goldman Sachs analyst Barkin Doganay, and previous Atlassian executive and MonetizeNow CTO Jeff Gibson.
The trio launched Kintsugi in 2021 in the aftermath of a landmark taxation case at the Supreme Court in 2018 that allowed states to require remote sellers to collect and remit sales tax.
Due to the lack of uniformity in sales tax laws across states, the ruling amplified the complexity of an already fragmented sales tax regime.
Manually navigating this web of tax regulations can be tedious, confusing and costly for businesses who run across multiple states, with non-compliance attracting penalties of up to 25% of the tax amount.
Kintsugi AI aims to tackle this by automating sales tax compliance with its comprehensive platform, covering real time nexus monitoring, AI-enabled product categorization, rooftop-level tax calculation and validation, sales tax registration, filing, exemption certificates handling, and back-tax compliance.
At its core, Kintsugi verifies each transaction through its real-time database of rules, tracks economic nexus on a real-time basis, identifies the appropriate tax rates for invoicing, and at the end of the month helps with one-click remittance and filing sales tax returns in each applicable state.
Powering this is an LLM which Kintsugi has built and trained across all sales tax regulations across 110,000 jurisdictions.
“Kintsugi addresses a real need; 48 percent of states rely on sales tax for a major source of revenue. Sales tax is defined and collected on a city, county and state level and performing this task manually takes hours, as does keeping track of ever-changing laws,” said Lisa Dolan, Managing Partner, Link Ventures.
“Kintsugi uses AI to make compliance fast and painless and then automates the process so companies can focus on their businesses instead of tax paperwork.”
“There are other companies that offer sales tax compliance solutions; Kintsugi’s single SaaS fee model and hands-off software management set it apart,” added Pujun Bhatnagar.
“We’re the solution that tracks, monitors, and automates sales tax compliance end-to-end, allowing businesses to get back to serving their customers. Legacy vendors have stopped innovating in this space, and many competitors are focused only on SaaS or E-commerce, missing key aspects of handling both seamlessly.”
Looking ahead, Kintsugi is planning on further strengthening its platform and team to put sales tax on autopilot for every company, no matter where in the world they operate.
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