Nicholas Rudder continued to run into the same tax problem when building his last startup, an education marketplace called ScholarSite.
“Every new country means a maze of registrations, applications, deadlines, and risks because marketplaces are required to pay taxes on their entire GMV (gross merchandise value), not just their take rate,” Rudder told TechCrunch. “It was a constant distraction. Instead of building a business, I was spending my time deciphering international compliance regulations, which I didn't want to be an expert on.”
He and co-founder Adrian Sarstedt were about to shut down ScholarSite (later called Sphere), so Rudder decided to keep the name but transform the product into something new.
“The world was globalizing, but the compliance infrastructure wasn't keeping up,” Rudder said.
In 2023, he solo-launched Sphere as a tax software vendor that helps companies scale across borders and achieve compliance. Rudder said the company is targeting companies in the Series B to IPO stage with a global customer base.
“We help businesses collect taxes on customer transactions,” he continued, explaining that businesses must collect taxes on purchases and remit them to authorities on a monthly or quarterly basis.
Sphere helps “automate registration, calculation, declaration and remittance obligations for companies,” he said. Sphere spent two years in stealth before officially launching, and its clients now include vibe coding platforms Lovable and Replit, as well as AI voice company Celebrities.
tech crunch event
San Francisco | October 13-15, 2026
As an edtech marketplace, the company has raised $4.3 million in seed funding. On Tuesday, tax platform Sphere announced a $21 million Series A led by a16z.
Rudder said the product takes less than 24 hours to set up. It integrates with major billing platforms such as Stripe and Campfire, allowing Sphere to capture a company's transaction data and assess its global tax exposure, he said. Sphere's AI tax audit and valuation modeling engine, or TRAM, comes into play to calculate the taxability of transactions, he said.
“TRAM takes the rules of every jurisdiction and codifies them to create a set of tax decisions, such as whether something can be taxed, along with the rationale and supporting citations for those decisions,” CEO Rudder explained.
Sphere's human team reviews and approves TRAM's outputs and approves them so they can be pushed to the tax engine, which applies taxes to transactions in real-time.
“There's no AI in that part of the system, so there's zero chance of hallucinations.”
Sphere also monitors how much tax companies pay in which regions and integrates directly with over 100 tax authorities around the world, allowing companies to register in different tax jurisdictions directly through Sphere.
“Once a business submits a registration, we send that information to the tax authorities and let them know when their registration will be processed and when they can start collecting taxes in their area,” Rudder said.
Finally, Sphere helps with filing and remittances. Rudder said the company automatically generates tax returns and filings, debits tax returns from customers' bank accounts and makes payments to tax authorities. It's the product he wanted when he founded his first company.
Other players in this market include legacy players Anrok and Avalara.
Although Stripe also provides global tax calculation and collection services, Rudder considers Stripe a partner rather than a competitor.
“Sphere is one of only three tax vendors in the world that is natively integrated into Stripe's Billing and Checkout products,” he said, adding that the company also has use cases that Stripe doesn't, such as the ability to complete an end-to-end compliance lifecycle.
Rudder described his fundraising process as “unintentional.” He said he was looking to raise funding at the time but knew he needed to move quickly to realize his ambitions.
“When we met a16z and heard what they had done for similar companies in the compliance and fintech space, we knew they were the right partner,” Rudder said.
Mark Andrusko, a partner at a16z, said the VC firm first met Rudder when he was working on ScholarSite. “Even though he didn't make it to the term sheet for that business, it was clear that Nick had the horsepower, guts and drive necessary to be an extraordinary founder,” Andrusco told TechCrunch.
After a few years, Andrusko said his team started hearing whispers about how promising a new company called Sphere was. “It took us five minutes to piece together that this was Nick's new business after the pivot. We immediately reached out and got an update.”
One aspect of the business that impressed Andrusko was how Sphere integrates into the region's geography.
“While both traditional companies and many of our newer venture-backed startup competitors often hand over their customers to third-party consulting firms to manage specific territories, Sphere has taken the time to build local rail and AI automation integrations that allow us to fully facilitate the entire sales tax compliance process end-to-end,” Andrusko said.
YC and Felicis Ventures also participated in the round. The new funding will be used to build infrastructure to connect with more local tax authorities. Expand your AI and engineering team and build an international sales team.
“I want this product to be an essential tool that finance teams look to when they want to expand into new markets,” Rudder said. “They may not realize that they are being exposed, not only to indirect taxes but also to all forms of trade compliance.”
This article has been updated to clarify that Sarstedt is no longer with the company.