Taxes can be a struggle, and a good software solution can save resources and time better spent elsewhere. That is where Fonoa comes in with its global tax automation platform, which has received new funding after an impressive 2021 year that saw the company with a 7x revenue growth. Fonoa plans to use the new funding to improve the company’s geo coverage and fuel expansion. Learn more by reading Fonoa’s funding announcement below.
We have raised $60 million to expand our global tax solutions. Investors in the Series B funding round led by Coatue include Dawn Capital, Index Ventures, OMERS Ventures, FJ Labs, Moving Capital.
The funding, which comes just six months after a $20m Series A round, underlines the success we have had in transforming the way digital companies including Uber, Zoom, Booking.com, Spotify, Teachable and Remote.com stay tax compliant. Our platform is the first digital tax solution with global coverage, providing a plug-and-play modular platform that helps businesses convert a costly and complex process into an automatic and seamless one. Using a simple API solution, we determine and calculate the right amount of tax a business should pay, in the right place, at the right time. This results in greater profitability for customers who can reduce their operating costs and increase their tax compliance at the same time.
A one-stop solution for global digital businesses
Fonoa was founded by three Uber alumni – Davor Tremac, Filip Sturman, Ivan Ivankovic – who experienced first-hand how difficult it is to correctly calculate and report taxes to authorities throughout the world. The existing crop of tax software solutions have not been built for the digital age and require clients to bring on armies of implementation consultants on projects that could take many months to complete. Equally, software developers for these solutions don’t always understand how digital-first businesses operate around the world, meaning customers can’t quickly adapt a tool to their needs in specific countries. They built Fonoa from the ground up and developed a plug-and-play platform that allows customers to automate all relevant aspects to ensure tax compliance globally.
Where previously customers would purchase goods and services within their own country and the company they purchased from would send the VAT to the Government, the growth in companies selling their products and services worldwide has seen governments lose substantial amounts of tax revenue. The OECD estimates that countries around the world on average struggle to collect 44% of these taxes, leaving them with a massive VAT gap in their budgets each year which they are desperate to close. As a result, more than 90 countries across the globe have introduced complex tax rules for digital transactions, shifting the liability to businesses and placing an increased responsibility on them to calculate, collect and remit their taxes globally.
We take the hassle out of all these changes and makes it easy and efficient for digital-first companies to understand, report and abide by the tax obligations in every country they work in. Our platform verifies the tax status of the buyer and seller, calculates the correct tax to charge and creates a locally compliant invoice after a transaction takes place, while also providing real-time reporting to a country’s government.
E-commerce boom increases demand
The demand for our services has only increased – with the company experiencing 7x revenue growth across 2021 – as the COVID-19 pandemic prompted a transformative shift in e-commerce shopping habits. With taxes part of almost every online payment, more and more businesses are set to benefit from our platform, as online payments are expected to reach $8.5tn in 2022.
To serve this demand, we will use the funding to improve the features of our product and continue our global expansion. We will also launch new products in the next 12 to 18 months. To do this, we – the company which has increased its headcount by 5x in the last 12 months to 110 employees across 20 countries and 35 nationalities – will double in size by the end of the year with a focus on engineering and sales. With new employees joining from companies such as Airbnb, Netflix, Meta, EY, Deloitte and PwC, we will be able to embed this knowledge and tailor our platform even further to suit more business models and industries including SaaS, the gig economy and content creation.
The original announcement can be found on Fonoa’s website.
Spencer Hulse is an editor at Grit Daily News. He covers affiliate, viral, and marketing news.