With the US tax season fast approaching, crypto-focused tax compliance firm TaxBit has closed its seed funding round after raising $5 million from an array of venture capital companies.
Announced on Monday, the financing round was lead by top Silicon Valley and blockchain venture capitals, including Winklevoss Capital, Fintech venture firm, TTV Capital, Dragonfly Capital Partners, Collaborative Fund, Table Management, and Album VC, among others.
Taxing crypto is complex, and so is the accurate calculation of tax amount form profits generated from crypto. Firms like TaxBit are trying to tap into this minor, yet lucrative field.
Commenting on the firm’s ambitions, Austin Woodward, founder and CEO of the company, said: “In such a highly regulated space with so many complexities, TaxBit is needed to remove the burden of proper cryptocurrency tax reporting from the shoulders of crypto users, exchanges, and merchants.”
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“TaxBit’s software and tax experts will accurately handle all of the back-end complexities, while providing users with an intuitive, user-friendly experience on the front-end.”
Targeting crypto traders in the major markets
The announcement also detailed that the fresh proceeds will be utilized to enhance the software of the tax-calculating platform and in the firm’s global expansion. Apart from targeting US customers, the Utah-based company is also planning to expand its reach to Canada, the United Kingdom, and Australia.
Launched in January 2019, the company primarily targeted retail customers with its automated tax calculating solutions. However, to tap into the lucrative enterprise client base, the firm is also developing an enterprise tax center suite.
“Navigating cryptocurrency tax laws is a byzantine process,” said Sterling Witzke, a partner at Winklevoss Capital.
“TaxBit’s technology eliminates this confusion and complexity by allowing crypto owners to seamlessly understand the full picture of their tax liability through an intuitive and easy-to-use platform. Solving for this pain point is integral to accelerating cryptocurrency adoption, and we are thrilled to back TaxBit on this mission.”