Zamp targets rising demand for gross sales tax options | TechCrunch

Till six years in the past, many e-commerce and SaaS companies may have averted paying gross sales tax to states the place that they had prospects, however no bodily presence. However as on-line procuring grew, states realized they had been dropping out on tax income.

The period of free-riding for on-line retailers resulted in 2018 when South Dakota took Wayfair to court docket over gross sales tax assortment. The Supreme Court docket in the end sided with South Dakota. 

Now, on-line shops and SaaS firms have to gather gross sales tax from their prospects wherever it’s required, which isn’t a straightforward process on condition that tax legal guidelines differ considerably by metropolis, county, and state.

Rohit Bhadange, who labored in enterprise capital and personal fairness, recognized gross sales tax compliance as a significant ache level for e-commerce and SaaS companies. So, about 18 months in the past, he launched Zamp, a startup whose software program can mechanically calculate and file gross sales taxes for companies of all sizes.

Since then, Zamp has grown its buyer base to over 400 firms and achieved annual recurring income within the mid-millions, in keeping with Bhadange. The quick progress captivated buyers.

On Thursday, Zamp introduced a $10 million Sequence A led by Valor Fairness Companions with participation from Venus Williams, Day One Ventures, and different buyers.

Along with increasing its e-commerce and SaaS shopper base, Zamp has begun to companion with accounting corporations grappling with a expertise scarcity brought on by declining curiosity within the career. The corporate’s accounting agency purchasers embody the top 25 US accounting firms, Baker Tilly and Withum.

Accounting corporations are beneath elevated stress to help purchasers with gross sales tax compliance, notably as states intensify their tax audits, Bhadange stated. “You may have this excellent storm the place enforcement is growing; tax compliance is growing, [but the number of] accountants is reducing.”

To fulfill that demand, Zamp is introducing a brand new product known as Z-tax, which helps accountants and bookkeepers present gross sales tax providers with out growing their headcount.

“We wish them to deal with greater worth advisory providers whereas we handle your entire gross sales tax course of on the again finish,” Bhadange stated.

Zamp shouldn’t be alone out there for gross sales tax compliance options for startups, notably SaaS companies. Its main competitor is Anrok, backed by Khosla Ventures and Sequoia. Anrok, based 4 years in the past, could also be barely older and bigger — having just lately raised a $30 million Sequence B — Zamp’s speedy progress signifies that there’s room for a number of gamers on this house.