The Californian venture capital firm Accel, together with the Berlin Visionaries Club and 20VC from London, invests 17 million euros in the startup Taxdoo, which was founded by three former scientific employees of the University of Hamburg.
Small e-commerce traders benefit from the global reach of internationally operating online trading platforms, but they often have problems due to the internationality, as they have to declare their VAT in different countries and follow the corresponding rules. Although the logistical handling of cross-border online trade is becoming increasingly simple, VAT law is lagging behind this development.
Four years ago, VAT expert Roger Gothmann recognised this problem and, together with Dr. Christian Königsheim and Dr. Matthias Allmendinger, developed software that determines which tax rate belongs on an invoice and which data must be reported abroad in the first place. Roger Gothmann began his career as a special VAT auditor at the tax office and for years coordinated EU-wide VAT issues at the Federal Central Tax Office. Allmendinger and Königsheim have already worked on the digitalisation of processes in the financial sector in their doctorates at the Chair of Banking and Behavioural Finance at the Faculty of Business Administration. The team was able to secure an EXIST start-up grant in 2016 with the help of Nadine Weitendorf from the University of Hamburg’s start-up service in cooperation with Nils Neumann from Hamburg Innovation GmbH (now the “beyourpilot” project). The chair holder Prof. Dr. Markus Nöth has supported the team as a mentor since they found the company. Dr Moritz Lukas, postdoc at the same chair, provides strategic advice to the team.
The Taxdoo software explains where taxes are due by automatically and systematically collecting, analysing and transmitting turnover data and creates all the documents needed to be compliant with VAT laws throughout the EU every month. VAT compliance becomes much easier, more reliable and cheaper: The Taxdoo software can be used for sales via Amazon, Ebay and own online shops based on the software provider Shopify, among others – and it is “plug and play”. Previously, traders had to awkwardly juggle Excel spreadsheets. This service has convinced customers: According to the company, over a thousand subscribe to the software. Christian Königsheim recently explained in a report in the Handelsblatt that Taxdoo has a turnover in the middle seven figures and has been making a surplus for a good two years. All without paid advertising. At the beginning of 2020, the number of employees rose from 25 to 50.
This success in a still rather untapped terrain has attracted US investors: The Californian venture capital firm Accel announced an investment of 17 million euros last Tuesday – together with the Berlin Visionaries Club and 20VC from London. Accel has already made a name for itself with its early financing of Facebook and has promising start-ups such as UiPath, Celonis and Personio in its portfolio. This is the first round of funding for Taxdoo. The startup has also been funded since 1 April 2016 by the EXIST-Gründerstipendium, an initiative of the German Federal Ministry of Economics and Technology (BMWi) and the European Social Fund (ESF) to support spin-offs from academia, which provided the three founders with funding totalling more than 140,000 euros.
Taxdoo can look to the future with optimism: Accel partner Harry Nelis, who will accompany the company as a supervisory board member in the future, recently told Handelsblatt that Taxdoo could shape a new segment for technology companies by “easing sellers’ way through the minefields of taxes and compliance. “Taxdoo is a very safe bank for online retailers,” e-commerce expert Steier also praised there, because: “In fact, there are other companies that also offer these services. Practically, it is the case that they are often criticised.” Traders complained that they sometimes have to pay high additional payments or penalties in the respective countries – only Taxdoo has not been the subject of such complaints so far.
Supplementary source: Handelsblatt
