Zamp targets rising demand for gross sales tax options | TechCrunch

Till six years in the past, many e-commerce and SaaS companies might have prevented paying gross sales tax to states the place that they had clients, however no bodily presence. However as on-line purchasing grew, states realized they had been shedding out on tax income.

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

Now, on-line shops and SaaS corporations have to gather gross sales tax from their clients wherever it’s required, which isn’t a straightforward activity on condition that tax legal guidelines fluctuate 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 robotically calculate and file gross sales taxes for companies of all sizes.

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

On Thursday, Zamp introduced a $10 million Collection 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 accomplice with accounting companies grappling with a expertise scarcity brought on by declining curiosity within the occupation. The corporate’s accounting agency purchasers embrace the top 25 US accounting firms, Baker Tilly and Withum.

Accounting companies are below elevated stress to help purchasers with gross sales tax compliance, notably as states intensify their tax audits, Bhadange mentioned. “You will have this good storm the place enforcement is rising; tax compliance is rising, [but the number of] accountants is lowering.”

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

“We wish them to give attention to larger worth advisory providers whereas we handle your entire gross sales tax course of on the again finish,” Bhadange mentioned.

Zamp will not 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 not too long ago raised a $30 million Collection B — Zamp’s fast development signifies that there’s room for a number of gamers on this house.