In July last year, the EU ended the €22 import VAT exemption, and new trading regulations between the EU and the rest of the world gradually came into effect. This was intended to create a level playing field with local European manufacturers and retailers. Complying with this new regulation in the high volume, low value-per-package e-commerce market has been a challenge for merchants and logistics operators from the UK, the US, China and the rest of the world. These players are looking for software-based solutions that can help handle the billions of cross-border packages affected by this new EU regulation. Solutions with a high degree of accuracy, speed and at a low cost per package are required.
Taking up the challenge to address the issue, Estonia-based cross-border e-commerce compliance platform Eurora Solutions has raised $40 million in funding. The oversubscribed Series A round was led by Amsterdam-based Connected Capital, with existing investors, including Change Ventures, Equity United and Eurora’s founder Marko Lastik participating. The company has earlier raised $3 million in 2021, just 9 months ago.
The new funding will be used for geographical expansion in the U.K., the U.S., and the Middle East, where rapid and high growth in the sector is expected. It will also be used to boost product development and potential add-on acquisitions.
The startup’s proprietary AI/ML-based platform automates tax, compliance and customs services. It assigns e-commerce products an appropriate HS code, calculates the applicable VAT and duty amounts, and automatically creates electronic declarations for EU duties and taxes via simple API integration.
The platform claims to deliver over 96% accuracy for e-commerce packages despite often patchy input data and operates at a fraction of the time and price of hybrid or manual code allocation solutions that are commonly used today.
The B2B platform can be used by online sellers, marketplaces, logistics and postal companies, as well as tax and customs authorities. Eurora already has over 200 clients worldwide.
Marko Lastik, founder and CEO, Eurora Solutions, said: “The number of different declarations, codes, reports, records and tax calculations required in the international shipping business is ever increasing. Without the correct data sets and automated solutions for tax calculations and electronic declarations, cross-border trade has slowed down, resulting in severe delays, fines, increasing costs and loss of customers. By using Eurora’s platform, merchants can make deliveries faster and at lower costs, which results in increased customer satisfaction and trust.”
Shaffy Roell, investment manager, Connected Capital, added: “We have seen a clear push from regulators to improve transparency and reporting for the increasing number of goods that enter through customs. Eurora has built a platform which is significantly improving compliance while reducing package delays and lowering costs for e-commerce parcels shipped into Europe.”