The largely unregulated, exponentially growing market that is cryptocurrency has become wildly popular in the past year. With investors and fans hailing from traditional investment backgrounds, to Gen-Z iPhone traders, the space has become as vast as it is unpredictable, reaching a recent market cap of $1.5 trillion. While interest is growing, there has been one key area that has until recently been underserved - simplifying cryptocurrency tax. That was until TaxBit entered the scene.
Founded in 2018 by Austin Woodward and his brother Justin, the Utah startup automates gains and losses from the cryptocurrency market to provide simple tax information for users of TaxBit. The platform to date has enabled customers to produce over 1 million sets of tax forms across the market verticals it serves. Its products TaxBit Enterprise and TaxBit Consumer transform the tedious task of cryptocurrency reporting that is compliant with tax law, while also offering users the benefit of being able to actively tax-optimize their investments and use of cryptocurrency.
While it started out as a consumer-facing product, TaxBit now offers software to a range of individual practitioners as well as the businesses that help them invest and trade, such as crypto exchanges, wallet providers, lending platforms, and others. To fuel the company’s growth, TaxBit recently raised $100 million in its very first Series A financing round. The funding was led by investment firms Paradigm and Tiger Global. In a nod from fintech heavyweights, PayPal Ventures, Winklevoss Capital, Coinbase Ventures, and others, including Bill Ackman and Qualtrics Co-Founder Ryan Smith, joined the round. The company’s funding to date stands at $107 million.
Speaking on how the investment will lead the growth of this much-needed startup, Woodward shared that the money will be used to invest in the company’s enterprise tools and international expansion. The company has set its sights on the United Kingdom as its first port of expansion. TaxBit also intends to broaden the usage of its product to offer something akin to a traditional enterprise resource planning tool for corporations that will aid them in managing tax-optimized crypto transactions similar to what some software tools do with foreign currencies. The company will also need to increase its 40 employees to 100 by the end of 2021 to meet its growth objectives.
Being the first in this space, the growth potential for the company in addressing the complex tax implications of crypto is boundless.