Taxdoo

Market position

Described in 2021 coverage as the leading VAT and financial compliance platform in European e-commerce, working with more than 1,700 merchants, tax professionals and marketplaces. It won the TAXCELLENCE Award 2020 as best 'Tax Technology Solution'. Coverage noted that broader fintech players such as Stripe were moving into sales tax calculation services, making the segment competitive and Taxdoo a potential partner or acquisition target.

End-to-end automation of the entire workflow — aggregation of data from multiple channels, analysis under all applicable regulations, preparation and filing of returns across the EU, and integration back into the seller's accounting system — combined with in-house VAT expertise; co-founder Roger Gothmann is described as an international VAT expert following a 10-year tenure at the German finance ministry. The company presents itself as the first multichannel e-commerce bookkeeping solution covering invoices, payment and transaction data and automated booking runs in one place, scalable from 100 to 100,000 transactions, and able to combine multiple interfaces (e.g. JTL with Amazon or eBay) without duplicate records.

Technology

API-based platform with automated connectors to more than 50 interfaces spanning marketplaces, shops, ERP systems, payment providers and banks. It automates transaction-level data ingestion, tax calculation and filings across Europe, performs daily GoBD-compliant bookkeeping, automatically matches payments to revenues, exports DATEV-compatible data, and uses artificial intelligence to verify VAT rates on outgoing invoices. The architecture is modular, with apps for individual use cases and the ability for external developers to build on top.

Go-to-market

Direct sales via product tours, 30-minute introductory consultations and demo requests on the website; content marketing through a blog, knowledge base, whitepapers, webinars and a newsletter; and partnerships with tax professionals, ERP systems and e-commerce agencies. Third-party developers can build on the platform, and ERP vendors have built their own connectors.

Online merchants selling across multiple marketplaces and their own shops, and tax advisors/tax firms with e-commerce clients; historically also marketplaces, payment providers and enterprises. A typical customer was described as selling on several marketplaces and its own shop with annual revenue of roughly EUR 5-10 million, while the largest customers were global consumer brands with revenue of EUR 150 million and above. Current services are directed exclusively at companies domiciled in Germany.

Geography

Headquartered in Hamburg, Germany, with VAT coverage and filings across the EU including dedicated content for Germany, Austria, the Netherlands, Poland and France; funding was earmarked for further European expansion. The website states that current services are offered only to companies based in Germany.

History

Founded in May 2016 in Hamburg, Taxdoo built an API-based platform for cross-border VAT and financial compliance. It won the TAXCELLENCE Award 2020 as best 'Tax Technology Solution' in December 2020 and raised a $21 million Series A the same month, led by Accel with Visionaries Club, 20VC and existing investor HTGF; Accel's Harry Nelis joined the board. Eleven months later, in December 2021, it raised a $64 million Series B led by Tiger Global with Accel, Visionaries Club and 20VC participating, bringing total funding to $84 million and funding European expansion and a planned doubling of headcount by the end of 2022.

Risks & controversies

Taxdoo's business depends on a frequently changing regulatory environment; 2021 brought Brexit-driven changes to UK e-commerce VAT and the EU's One-Stop-Shop reform, described as the biggest VAT reform since 1993, with each reform creating unintended consequences and additional compliance burdens. Larger fintech platforms expanding into sales tax and accounting services, such as Stripe, represent competitive pressure.