Kintsugi, a Silicon Valley-based startup that helps companies uninstall and automate their business tax compliance, has raised $18 million in new funding led by Vertex, a global provider of indirect tax technology solutions. The startup plans to enable more small and medium-sized businesses to use their AI-enabled features for tax calculations and applications.

The continued growth of e-commerce and cross-border trade, coupled with increasingly complex tax regulations, has driven global demand for tax automation solutions. Kintsugi's goal is to help companies with their software, whether it's Shopify, Stripe, ChargeBee, QuickBooks, or custom API implementations, integrate it with revenue generation points. This helps bring in 360 revenue observations and allows startup intake data and immediately calculate taxes.

"Our goal is just like Uber's work on taxis and Stripe that pays credit card," said Pujun Bhatnagar (pictured above, above, left) in an exclusive interview.

The San Francisco-based startup, founded in 2023, considers a 2018 Supreme Court ruling that allows states to get online sellers to charge sales taxes, even if they don’t have brick-and-mortar stores in the state, as a turning point for the industry. It impacts e-commerce business while helping states increase tax collections. Capital of existing automated tax compliance companies including Avalara took advantage of the shift to increase revenue. But emerging startups like Kintsugi are starting to take advantage of advances in AI to gain market share.

"We are also half of Avalara and we also replace the CPA (certified public officials). So only regular operators can do it, we're saying, we're saying, in seven clicks and three minutes, install our app, what we're going to be, and then you can tell you your sales tax, and then you can click under the monthly and take three minutes to file your sales tax," Bhatnagar's sales tax. ”

The startup allows businesses to calculate their business tax liability for free, although it submits fees to taxes. It also provides an option to automatically send money to automatically submit business tax after ingested data is calculated through different revenue generation channels.

Kintsugi generated $3 million in annual revenue last year with the goal of spanning $10 million by the end of 2025. The startup also touts a 0.1% churn rate with a base of 2,400 customers - from re-income businesses to companies that generate about $50 million in revenue, and even $500 million in revenue.

Pennsylvania-based Vertex found Kintsugi complements its existing focus on large enterprise multinationals and complex mid-market operations.

"We have relationships with some of the largest companies in the world that operate the market, who run e-commerce businesses, and we are not serving small companies today," Chirag Patel, chief strategy officer of Vertex, told TechCrunch. "Although Kintsugi is very professional and good at it and can scale this business model, it's hard to do. So, it's two companies together."

The terms of the agreement include $15 million in minority investment, ownership interests representing Kintsugi, IP sharing, and business partnerships based on revenue sharing models. The startup also raised $3 million from existing investors. Overall, the new funding estimates the startup's currency of $150 million, up from the $80 million worth in November.

In addition to its stock investment, Vertex has pledged to invest $100 to $12 million in Kintsugi this year to leverage its IP for AI integration.

“We’ve invested in AI, but we’re a publicly traded company with quarterly pressure,” Patel said. “So, in a way, we can accelerate a little by leveraging the innovation that’s happening in Kintsugi.”

Bhatnagar told TechCrunch that Kintsugi's margins have exceeded 93%.

The startup employs 95 employees, which previously expanded from the United States to Canada and Europe, now plans to live in South America, Africa and the East, including India and China.

Currently, SaaS companies account for 45% of Kintsugi's customer base, worth $5.5 million and $7.7 billion. But a partnership with 47-year-old investor Vertex may help startups attract customers in various fields.