# Kintsugi’s AI-Powered Sales Tax Solution Doubles Valuation in Just Six Months

## Kintsugi’s AI-Powered Sales Tax Solution Doubles Valuation in Just Six Months

Silicon Valley startup Kintsugi, an innovator in AI-driven sales tax compliance, has announced an impressive $18 million funding round, spearheaded by Vertex, a leading provider of indirect tax technology. This latest investment values Kintsugi at $150 million, a doubling of its $80 million valuation from just six months prior. The company plans to use the fresh capital to broaden the reach of its AI-powered tax calculation and filing solutions, specifically targeting small and medium-sized businesses (SMBs).

Kintsugi’s rapid growth highlights the increasing demand for automated tax solutions in an era defined by booming e-commerce, expanding cross-border trade, and increasingly complex tax regulations. The company’s software integrates seamlessly with popular revenue-generating platforms like Shopify, Stripe, Chargebee, and QuickBooks, as well as custom API implementations, providing a comprehensive view of revenue streams. This integration enables Kintsugi to ingest data and calculate sales taxes instantly, streamlining a process that is often cumbersome and time-consuming for businesses.

“Our goal is to do for compliance what Uber did for taxi cabs and Stripe did for credit card payments,” said Pujun Bhatnagar, co-founder and CEO of Kintsugi, in an exclusive interview. “We want to tackle the compliance piece in 171 countries.”

Founded in 2023, Kintsugi identified a pivotal moment in the industry with the 2018 Supreme Court ruling that allowed states to require online sellers to collect sales tax even without a physical presence. This ruling, while benefiting states’ tax revenues, added significant complexity for e-commerce businesses. While established players like Avalara capitalized on this shift, Kintsugi leveraged advancements in AI to create a more accessible and cost-effective solution.

“We are half the cost of Avalara, and we replace the CPA as well,” Bhatnagar explained. He emphasized the ease of use of Kintsugi’s platform, stating that users can install the app, determine their sales tax liability, and file their taxes in a matter of minutes.

The startup offers a free service for calculating sales tax liability, charging only for the filing process. Businesses can also opt for auto-remit, which automatically files sales taxes based on the data ingested from various revenue channels.

Kintsugi reported $3 million in annual revenue last year and aims to exceed $10 million by the end of 2025. The company boasts a low churn rate of just 0.1% and serves a diverse customer base of 2,400 businesses, ranging from pre-revenue startups to companies generating hundreds of millions in revenue.

Vertex, based in Pennsylvania, sees Kintsugi as a complementary addition to its portfolio, which primarily focuses on large multinational enterprises and complex mid-market businesses.

“We at Vertex have relationships with some of the largest companies in the world who run marketplaces, who run e-commerce businesses, and we’re not today in the business of servicing small companies,” said Chirag Patel, chief strategy officer at Vertex. “Whereas Kintsugi is highly specialized and incredibly good at it and can scale that business model, which is hard to do. So, it’s the two companies together.”

The agreement between Vertex and Kintsugi includes a $15 million minority investment (representing a 10% ownership interest), IP sharing, and a commercial partnership built on a revenue-sharing model. Existing investors contributed an additional $3 million.

Looking ahead, Kintsugi plans to expand its global footprint beyond the U.S., Canada, and Europe, with upcoming launches in South America, Africa, and Asia, including India and China. The company currently serves a customer base that is 45% SaaS companies, handling 5.5 million transactions valued at $7.7 billion. The partnership with Vertex is expected to broaden Kintsugi’s reach across various sectors.

Furthermore, Vertex is committed to investing an additional $10-$12 million in Kintsugi this year to leverage its IP for AI integrations. “We’re already investing in AI, but we are a publicly traded company that has quarterly pressures,” Patel stated, highlighting the opportunity to accelerate innovation through Kintsugi’s cutting-edge technology.

With impressive profit margins exceeding 93% and a clear vision for the future, Kintsugi is poised to revolutionize sales tax compliance for businesses of all sizes, leveraging the power of AI to simplify a traditionally complex process. The company currently employs 95 people and plans to continue its expansion in the coming years.