Share this @internewscast.com
Tax software company Column Tax, which provides an API that enables mobile banking and fintech companies to offer tax products to their users, announced today that it has raised a $21.7 million series A. The round was led by Bain Capital Ventures with participation from Felicis and Not Boring, as well as existing investors Core Innovation Capital and South Park Commons.
Gavin Nachbar, cofounder and CEO of Column Tax, says that they started the platform once we realized they had an idea for a real solution in regard to tax returns for people who live paycheck to paycheck struggling to make ends meet.
“It became our ambition to build software to democratize access to the type of tax advice that only wealthier Americans currently have via CPAs and other services,” Nachbar says. “We decided we wanted to try and bring that level of service through software to all Americans.”
Nachbar says that they believe the solution is building APIs and STK to power tax filing and year round tax products in every mobile bank, neobank, fintech or financial app to drive more efficiency and accuracy.
By partnering with apps that already know something about your financial life, e can adjust that data and give people a jump on their tax filing and get the most accurate and efficient tax filings experience.
The way the company works is when tax filing season comes up, a user will access Column Tax via an existing partner app (where Column Tax is embedded) and when a new user session starts the hosts app will passes al the information for the tax filing, with the user’s permission.
Column Tax is then able to pre-fill out the tax questionnaire, generate whats a custom tax questionnaire to gather the rest of the data such as other income, information about credits, or information about deductions. The company then collect that have a tax engine (a software they’ve built that understands federal tax and codes), do the official tax filing and then help get the tax refund deposited in their accounts.
Column Tax generates revenue is through standard API pricing where its partners pay per filing, based on volume. The company counts banking apps such as Lance and Solo among its clients, and the company grew annual contracts value 15x between the $5.1 million seed round last summer and the Series A.
Cofounders Gavin Nachbar and Michael Bock (the company’s CTO) met at Waymo where they worked on self-driving cars for several years. The two launched Column Tax in February of last year and since then, they have grown the company 11 employees.
Kevin Zhang, partner at Bain Capital Ventures, which led the investment round says that they were excited about the company’s vision where planning the tax filing and tax optimization for individuals could be something that happens throughout the year.
“It’s a product vision where users make decisions while having in mind the impact on tax filing and tax obligations the whole time, as opposed to once a year activity where you’re already surprised as to how much you might be refunded,” Zhang says.