A 2018 Supreme Court decision removed the requirement that e-commerce retailers must have a physical location within a state to be able to collect sales tax on residents' purchases within that state. did. The decision was a boon for the state, but a headache for e-commerce sellers.
Kintsugi aims to reduce and automate the burden of consumption tax calculation and filing for businesses. The San Francisco-based company's AI technology connects to a company's billing and payment systems and understands which states they owe sales tax in. Next, register the user in the correct state. From there, the system can automatically calculate and remit the sales tax a business should pay to stay in compliance.
Kintsugi raised $6 million in a Series A round led by Link Ventures earlier this year, giving it a valuation of $40 million after an April valuation. The company has since reopened its Series A round, accepting $4 million in additional capital led by Airwallex and doubling its valuation to $80 million.
Pujun Bhatnagar, co-founder and CEO of Kintsugi, said he became interested in the sales tax space while working as a senior machine learning engineer at Meta in 2018. Bhatnagar told TechCrunch that both his father and grandfather worked in taxation throughout their lives. In 2018, Bhatnagar found herself unsure of what she wanted to do with her life. That happened to coincide around the same time as the Supreme Court ruling, he said, and opened up a whole new market worth exploring.
“It’s basically a collection of 52 different types of small countries.
When it comes to local governments, they have their own laws and jurisdiction,” Bhatnagar said. “And 48 of those jurisdictions have sales tax laws.”
To really understand the problem, Bhatnagar said he started manually calculating sales taxes for e-commerce and SaaS companies a year and a half ago to really understand the problem before writing code. Ta. Kintsugi's first few employees were also forced to calculate consumption tax by hand.
From there, we built a platform and algorithms to modernize and automate sales tax compliance. Bhatnagar said that by building the models in-house, the results were more accurate than competitors that relied on large, comprehensive language models. He said the company also constantly monitors humans to monitor accuracy.
The company was officially established in 2022 and launched its website in August 2023. Bhatnagar said inbound interest has been growing quickly and Kintsugi has been able to grow its customer base to more than 1,100 users in the past year. Earnings of $1 million.
Kintsugi isn't the only company looking to modernize its sales tax processes. Competitors include Anrok, which has raised more than $50 million in venture funding, and Anrok, which has raised more than $19 million in venture funding, in addition to a number of traditional companies that outsource processes to people in countries like India. Includes CereTax. This is the same type of work that Bhatnagar's family has undertaken.
Bhatnagar believes one of the reasons Kintsugi is in such high demand is its approach to customer acquisition. The company allows potential customers to sign up for free and test it out to see if they like it. If you choose to proceed, you can pay $100 per tax return or create a custom plan. Bhatnagar added that some competitors charge high fees just to onboard on their platform.
“We're the only company in this space that has a 'Get Started' button and a button that says 'Get a free sales tax analysis.'” [button]” said Bhatnagar. “And it's not just a one-time thing. If you create a free account, the report will be updated every seven minutes. This is something valuable that we would like to provide for free.”
Kintsugi plans to use the new capital to continue expanding its technology and help prepare for expansion into Canada and Europe.
“We are a bunch of nerds,” Bhatnagar said. “We're not trying to sell you snake oil. Connect your data and see the results.”