Home SAAS Anrok raises $ 4.three million to resolve gross sales tax for SaaS...

Anrok raises $ 4.three million to resolve gross sales tax for SaaS corporations – TechCrunch

It’s easier than ever to develop a product and sell it in the US or worldwide. But if you want to do this without incurring the wrath of any particular state or nation state, your best bet is to get your tax affairs in order. That’s why Stripe’s news last week that the company was developing tax-focused tools to help its clients manage their government bills was significant.

But for SaaS companies, it can be more complicated from a tax perspective. That’s what Anrok, a startup working on developing sales tax software for SaaS companies, told TechCrunch.

The company’s CEO, Michelle Valentine, said modern software companies need specialized help. And their startup today announced a $ 4.3 million fundraiser to support their efforts. The capital event was hosted by Seqouia and Index, the latter company where Valentine once worked.

Anrok offers its service through an API and calculates based on the total value of sales it helps a customer manage. The percentage fee decreases with volume, and you cannot pay more than 0.19% of the managed revenue. So it’s pretty cheap considering how high the gross margins are on software.

Anrok’s founding team: Michelle Valentine and Kannan Goundan. About the company.

Valentine said there are three things that make SaaS tax issues more complex than other products. The first deals with addresses. Software companies have to pay sales tax where customers are located and often only have partial information. Anrok will help with this problem. The CEO also said that SaaS variable billing makes collecting the right amount of tax an interesting topic and that states have tax laws specific to the software market that need to be navigated.

As such, a more mass-market solution may not be the best solution for SaaS companies that want to avoid both state hassles and the work of handling tax matters themselves.

It’s not difficult to see why Anrok was able to raise capital. The company is in the early stages with its first customers on board, so it isn’t seeing the kind of revenue growth that investors want in the later stages. Then what were its more appealing attributes? From our point of view, on-demand pricing and a simply gigantic market.

Sure, Anrok serves SaaS companies, but it uses what could be called a post-SaaS business model. On-demand or usage-based pricing is becoming increasingly popular today for billing software products, which brings Anrok closer to the top in terms of business model. And the company’s market is essentially every software company out there. That’s a lot of TAM to work into, something that investors love to see.

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