Today, IVP is proud to announce our investment in TaxBit, the leading tax and accounting software provider for the digital economy. We couldn’t be more thrilled to co-lead TaxBit’s $130M Series B to support CEO Austin Woodward and the entire TaxBit team on the road ahead.
Here’s why we invested:
Crypto Proliferation = Large and Growing Market Opportunity
Over the last decade, cryptocurrency has grown from an obscure idea to mainstream adoption, with the market cap of all cryptocurrencies recently surpassing $1 trillion USD. And crypto proliferation has brought the need for infrastructure to support the ecosystem – including tax and accounting software. Cryptocurrencies are capital assets where transactions create taxable events. Selling crypto for fiat, trading crypto coin-to-coin, and using crypto to purchase a good/service all have tax implications. As a result of this complexity and due to increased regulatory scrutiny in the US and internationally, tax compliance is becoming a necessity for the rapidly growing number of consumers and businesses completing crypto transactions. TaxBit solves this problem by providing a suite of tools to help individuals and enterprises demystify the constantly evolving digital asset tax landscape. Similar to how Coinbase (where IVP led the company’s 2017 Series D) enabled mass adoption of buying and selling cryptocurrency, we believe TaxBit will become a key enabler of the next wave of fintech innovation by powering the tax and compliance capabilities of fintech startups and non-crypto-native financial institutions alike.
A Unique Growth Flywheel: Partnering with Consumers, Enterprises, and Tax Authorities
Startups are often told to focus on a single market as they scale. And that’s normally sound advice. It’s difficult to grow multiple lines of business simultaneously, especially when you’re hiring as fast as possible, adding product features, and putting out fires at an early-stage startup. That’s why it’s all the more impressive that TaxBit is already serving three distinct customer personas: individual consumers, enterprises, and government tax authorities. By serving all the constituents across the cryptocurrency tax ecosystem, the company has created a unique growth flywheel as the trusted middleman making tax compliance transparent and straightforward.
Hypergrowth Driven by Exceptional Leadership
It’s hard to think of a better example of founder-market-fit than TaxBit. Austin and Justin Woodward founded TaxBit in 2018 with significant experience in cryptocurrency, tax, and accounting. In addition to being TaxBit’s CEO, Austin is a CPA and scaled the accounting function at Qualtrics to its acquisition by SAP and ultimate IPO. Justin is an attorney, and before co-founding TaxBit, prosecuted cryptocurrency legal cases in Salt Lake City’s US District Court. Additionally, Austin and Justin have proven themselves as hypergrowth company scalers. In just the last year, TaxBit has hired an experienced executive team (Zac Corker, Simon Frey, Michelle O’Connor, and Jordan Plater, among others), announced leading fintechs as customers (BlockFi, Gemini, OKCoin, PayPal, Uphold, and others), partnered with the IRS, and raised three funding rounds. And as Austin puts it, “this is just the beginning…”
TaxBit has tripled headcount in the last five months and plans to double its employee count again by the end of 2021. If you want to participate in the next wave of cryptocurrency adoption and fintech innovation, visit here to see open roles.