Avalara Files for IPO

Tax compliance specialist Avalara hinted at big plans for its 14-year-old company this week. The Seattle-based firm filed to go public, according to an S-1 registration statement filed on May 11.

According to the document, Avalara plans to raise $150 million in common stock proceeds for the IPO. In the S-1 registration statement, the company said its plans for the funds are “to use the net proceeds from this offering for general corporate purposes” which it expects will include “headcount expansion, continued investment in our sales and marketing efforts, product development, general and administrative matters, and working capital.” Avalara also plans to use a portion of the proceeds to “repay the outstanding balance under our revolving credit facility.”

While the timing of the IPO has not been disclosed, Avalara intends to trade on the New York Stock Exchange under the ticker AVLR.

Since it was founded in 2004, Avalara has grown to serve 7,760 core customers and has raised $340 million from investors such as TCV, Battery Ventures, and Sageview Capital. The company has made four acquisitions, including VATlive, VAT Applications, HotSpot Tax, and EZTax.

Avalara presented at our developers conference at FinDEVr San Francisco 2015 on “The Wacky World of Sales Tax,” showing its APIs available for developers. Earlier this month, the company won QAD’s Solution Partner of the Year award.

Finovate Alumni News

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Around the web

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This post will be updated throughout the day as news and developments emerge. You can also follow all the alumni news headlines on the Finovate Twitter account.

44 Alums Populate CB Insights’ Fintech 250 List

This week, CB Insights unveiled its Fintech 250 list. The research outfit selected 250 emerging, private companies in 17 sub-sectors of fintech that are changing the face of financial services. The roster includes 44 Finovate and FinDEVr alums that were selected using CB Insights’ data-driven process that analyzes company momentum, market participation, funds raised, and investor quality.

The list is in alphabetical order.

Algomi

AutoGravity

Avalara

Behalf

Betterment

Blend

Chain

Coinbase

Credit Karma

Currencycloud

CurrencyFair

Fenergo

Financeit

Gusto (formerly ZenPayroll)

Juvo

Kabbage

Kensho

Kreditech

Klarna

LendUp

Moneytree

PayNearMe

Payoneer

Personal Capital

Plaid

Quantopian

Quovo

Revolut

Ripple Labs

Roostify

Signifyd

SocietyOne

Socure

Tink

Token

Tradeshift

Transferwise

TrueAccord

Trulioo

VATBox

Wealthfront

Xignite

Zooz

Zopa

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On FinDEVr.com

  • Avalara Adds New CMO Jeremy Korst.

The latest from FinDEVr Silicon Valley presenters

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Alumni updates

  • Flybits CEO Hossein Rahnama interviewed in TechRepublic feature on IoT trends in 2017.
  • ScientiaMobile recognized by CIOReview as one of the most promising CDN solution providers of 2016.
  • AFK Insider lists Craft Silicon’s Uber-challenging app, Little, in its look at major technology developments in Africa in 2016.
  • FinDEVr alum Streamdata.io joins Google Technological Partner program.
  • Inc. lists Xero and PayPal among 8 business apps that will crush it in 2017.
  • LTP: Trulioo CEO Stephen Ufford writes about the problem of gift card fraud.

Stay current on daily news from the fintech developer community! Follow FinDEVr on Twitter.

Microsoft Marketing Vet Jeremy Korst Joins Avalara as New CMO

avalara_homepage_jan17_b

Starting in 2017 former Microsoft executive Jeremy Korst will be the man driving the message at tax compliance innovator and FinDEVr alum, Avalara. The Seattle-based company announced this week that Korst will join Avalara as its new chief marketing officer and executive vice president. Coming onboard at what Korst called “an exciting inflection point” for the company, he praised Avalara’s “ideal combination (of) a terrific executive team; a cohesive, unique culture that embraces the ‘power of Orange;’ a proven platform; and a massive global market opportunity.”

avalara_jeremykorstKorst (pictured) arrives at Avalara after several years at Microsoft where he led planning and execution of the global launch of Windows 10. Previous to Microsoft, Korst served as vice president and general manager at T-Mobile, and senior product marketing manager at AT&T Wireless/Cingular. A member of the board of a number of companies including Shoelace Wireless and 9104 Studios, Korst is a mentor for Seattle-area technology accelerator, 9Mile Labs. He has a BA in Economics, Politics, and Government from the University of Puget Sound, and a MBA from the Wharton School, University of Pennsylvania.

At Avalara, Korst will be responsible for brand, demand generation, as well as channel, international, product, and customer marketing. Avalara general manager and CRO Pascal Van Dooren said Korst’s experience in marketing “some of the most storied names in tech … make(s) him an ideal fit for Avalara.”

Avalara presented “The Wacky World of Sales Tax” at FinDEVr Silicon Valley 2015, explaining how its API makes it easy for developers to integrate transactional tax compliance into their applications. Last fall, Avalara announced an investment of $96 million that took its total capital to more than $300 million. In August, Avalara added a set of enhancements to its CertCapture management solution for compliance documents. And in June, in addition to unveiling a new integration with Stripe, the company was recognized at the American Business Awards.

Finovate Alumni News

On Finovate.com

  • Microsoft Marketing Vet Jeremy Korst Joins Avalara as New CMO.

Around the web

  • New York-based BizFi reaches $2 billion in originations.
  • LTP: Trulioo CEO Stephen Ufford writes about the problem of gift card fraud.
  • Boku extends partnership with Microsoft to support carrier billing to France.
  • Exostar teams up with Taulia to bring supply chain finance to the aerospace and defense industry.
  • Avoka, SocietyOne, and SuiteBox named finalists for Fintech Business Awards.
  • HBR: Narrative Science CEO Stuart Frankel writes about talking chatbots.
  • Quantopian recognized by Boston Globe as a “Company to Watch in 2017.”
  • Let’s Talk Payments features Kontomatik’s successful 2016.
  • Dashlane to support Intel Software Guard Extensions to help protect your passwords with hardware-enhanced security.
  • OurCrowd marks 4 years, $320m raised, 100 startups, 9 exits.

This post will be updated throughout the day as news and developments emerge. You can also follow all the alumni news headlines on the Finovate Twitter account.

Fintech Trending: RegTech Reality Check, Blockchain Bandwagon, and IBM’s New Wallet

makecompliancegreatagain_redhat

Hat, courtesy of Alloy, a customer-onboarding specialist that debuted at FinDEVr in October.

The dream of RegTech is alive at Finovate

Deloitte recently asked what we should make of regtech in a new report titled, “RegTech is the new FinTech: How agile regulatory technology is helping firms better understand and manage their risks.” To the extent that regtech represents technologies, strategies, and solutions designed to help firms better meet regulatory obligations, remain compliant, and/or secure their processes, there may be less new here than meets the eye. Compared to insurtech, regtech firms have been prominent players in the fintech firmament for years.

To its credit, Deloitte is aware of the “old-is-new-again” aspect of regtech. The report notes that “while the name is new, the marriage of technology and regulation to address regulatory challenges has existed for some time with varying degrees of success.”

Indeed. Consider companies like Gremln (F14), which demonstrated a social media platform specifically for regulated industries, and Finect (F13), which unveiled a compliant communication platform for financial professionals. Qumram (F16) provides software that helps ensure complaint communication by recording digital interactions from web, social, and mobile channels.

My Virtual Strongbox (F14) introduced the kind of secure document-storage technology that can help FIs better manage customer documentation. Global Debt Registry, another F14 presenter, provides compliance and risk-management solutions to the account-management industry. OutsideIQ (F16) enables FIs to uncover regulatory risk using a combination of machine learning and human analysis. FundAmerica (F15), arguably one of the most explicitly regtech companies to demo at Finovate, provides crowdfunding platforms with APIs for a wide variety of “mission-critical, back-end regulatory requirements.”

Additionally, there are a sizeable number of credit risk analysis innovators such as QCR (F15), CreditHQ (F16), and FICO (FD16); companies like Avalara (FD15) that help merchants recognize and satisfy sales-tax requirements (or by that token, even a VATBox (F15) that helps recover VAT fees for international travelers); and cloud-based auditing technologies like those available from Auvenir (F16), whose identity as a fintech company was a topic of our deliberations.

And all of this is to say nothing of the even larger number of security and authentication specialists whose technologies—at least by Deloitte’s definition—can be considered regtech. Note that Deloitte’s Ireland-based rundown of regtech companies includes Finovate alum Trustev (F14), whose online ID-verification technology is very much in the same category as dozens of other security, authentication, verification, anti-fraud innovators.

The question as to whether regtech as a “thing” (as the millennials say) can be separated from the broader fintech discussion is likely more of a marketing decision than anything else. Clearly regtech has the ranks; the issue is to what degree does distinguishing them as a type of innovator apart from the larger fintech world make it easier for these companies to attract top talent, develop necessary solutions, and raise the capital to drive and grow their businesses. From the perspective of fintech in general—and Finovate/FinDEVr in specific—we’re happier having regtech innovating from “inside the tent,” as opposed to being outside the tent trying to find a way in.

See also:

Blockchain bandwagon

Two more major players jumped on the blockchain bandwagon. IBM (FD16) showed its Hyperledger at FinDEVr last week and Visa (FD14) announced its cross-border payment system built on blockchain-like distributed ledgers, an apparent challenge to Swift. The technology is powered by Chain (FD15) which counts Visa, Capital One (FD15) and Citibank as investors. According to Javelin Strategy, banks will invest $1 billion this year in blockchain initiatives.

Mobile payments gets another huge player

Speaking of IBM, one of the more surprising announcements at Money2020 was the launch of IBM Pay, a private-label mobile payments and POS system. Details are sketchy, but in the IBM video below, it appears to be a Starbucks-like QR code system. It’s part of IBM’s Watson Commerce initiative.

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  • Lleida.net Calls New Patent a Turning Point.

Alumni updates

  • Entersekt listed among 100 most promising African fintech companies of 2016.
  • Aurionpro joins Temenos MarketPlace.
  • Avalara Raises $96 Million in New Funding.

Stay current on daily news from the fintech developer community! Follow FinDEVr on Twitter.

Avalara Raises $96 Million in New Funding

avalara_homepage_september2016

We’re busy working on next month’s FinDEVr Silicon Valley developer’s conference (tickets still available), so we were thrilled to hear news of a major investment in Avalara, one of our FinDEVr alums from last year’s event.

Avalara, an innovator in automated tax management for small businesses, raised $96 million in new funding from a group of investors including Warburg Pincus, Sageview Capital, and Technology Crossover Ventures this week. Moreover, the company hinted it may be considering an initial public offering in the near future.

Quoted in GeekWire, company CEO Scott McFarlane called the possible IPO a “terrific outcome for Avalara someday if all the cards came together.” Avalara will use $50 million of this week’s investment to support acquisitions and growth—particularly its Compliance Cloud platform. The balance will be used to buy back shares from the company’s early investors. “This financing offers some long-term individual shareholders a liquidity event, while enabling more recent institutional investors to increase their stake,” McFarlane said. Avalara’s total capital raised is more than $318 million.

avalara_stage_fd2015

Loke Uei Tan discussed Avalara’s APIs during his presentation “The Wacky World of Sales Tax” at FinDEVr Silicon Valley 2015.

Justin Sadrian, managing partner at Warburg Pincus, called Avalara “the ideal platform company” his firm seeks for investment. Ned Gilhuly, founding partner at Sageview Capital, praised the automated tax-management specialist’s revenue growth since he began investing in Avalara, adding “going forward, we are as bullish as ever on the company’s growth prospects.”

Founded in 2004 and headquartered in Seattle, Washington, Avalara presented “The Wacky World of Sales Tax” at FinDEVr Silicon Valley 2015. Loke Uei Tan, senior manager for developer relations, showed how APIs help developers solve the problem of delivering accurate transitional tax information from more than 12,000 tax jurisdictions in the U.S.

Last month, Avalara added a number of new enhancements to its compliance document-management solution, CertCapture. In June, Avalara announced both a new integration with Stripe as well as earning recognition at the American Business Awards. Avalara calculates $100 million in taxes daily, and remitted $14.4 billion in taxes in 2015.

Finovate Alumni News

On Finovate.com

  • CoverHound Launches Insurance for Small Businesses
  • Avalara Raises $96 Million in New Funding

Around the web

  • Dwolla to power same day ACH transfers with new API.
  • Let’s Talk Payments interviews Tommy Petrogiannis, eSignLive CEO.
  • WePay chooses Workflow Manager from Sphonic to help meet KYC and KYB requirements.
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  • Expensify launches Concierge, and AI virtual assistant.
  • Cachet Financial Solutions to Deploy Select Mobile Deposit Solution for Mobile-Only Bank Varo Money.

This post will be updated throughout the day as news and developments emerge. You can also follow all the alumni news headlines on the Finovate Twitter account.