Taxfix, a Berlin-based automated tax software, has raised a $65 million Series C led by Index Ventures, with support from existing investors Valar Ventures, Creandum and Redalpine. The new round puts the German company’s total funding somewhere just over $100 million.
The mobile tax app automates the process of filing a tax return by simulating a conversation with a tax accountant. The algorithm asks around 70 questions from a pool of 3,000, each tailored to the user’s circumstances, and reportedly, the return is filed in an average of 22 minutes. The service is free if the expected return is less than €50.
The fintech company claims that, since launching nearly three years ago, the software has helped collect €270 million for its users – 65 percent of whom had never filed a tax return before.
“Taxfix have made filing tax returns simple and affordable for everyone, and so are putting millions of euros back in people’s hands every day. There aren’t many apps that can play such a valuable role in personal finance,” said Neil Rimer, a partner at Index Ventures who will join the company’s board.
Swiss entrepreneurs Mathis Büchi and Lino Teuteberg founded the startup when they realized that about 7 million Germans, faced with a complex bureaucratic process or an expensive professional accountant, simply don’t file each year.
“We are not particularly passionate about taxes per se, but we care about helping people with things they really struggle with,” said Büchi, the scale-up’s CEO.
Apparently the two founders picked a lucrative pain point. Revenues have reportedly tripled since last year, when the company raised a $30 million Series B round.
The latest funding will help grow the teams in Berlin and Madrid, and also fuel expansion into new countries. Adapting to new tax jurisdictions might be made easier by the app’s custom programming language, TaxML, which the company created so that actual, ordinary accountants can encode tax law without the help for a programmer.
Looking ahead, Taxfix expects to expand beyond taxes, adding other assisted financial services such as investments and credit. Büchi added, “We see a lot of potential in becoming not just an automated tax accountant, but more like a personal digital financial accountant in a few years.”
Photo: Taxfix founders Mathis Büchi (CEO) and Lino Teuteberg (CPO)