Avalara has raised $172.0M in total across 4 funding rounds.
Avalara's investors include American Express Ventures, Arthur Ventures, Battery Ventures, Bessemer Venture Partners, Costanoa Ventures, Emergence Capital, Ann Winblad, Jackson Square Ventures.
Avalara is a leading provider of cloud-based tax compliance automation software that simplifies complex tax processes for businesses worldwide. Founded in 2004 and headquartered in Seattle, Washington, it serves over 28,000 customers by automating sales tax, VAT, GST, excise, and other indirect taxes through its core product, AvaTax, which processes millions of tax determinations daily in under 60 milliseconds.[1][2][3][5] The company's mission is to be part of every transaction in the world by enabling businesses to achieve compliance with confidence, freeing them to focus on core operations rather than manual tax burdens.[1][2][3][4] Avalara demonstrates strong growth momentum: it went public in 2018, benefited from the Supreme Court's Wayfair decision expanding remote sales tax requirements, and was acquired in 2022 by Vista Equity Partners for $8.4 billion, now operating as a private company with over 4,900 employees globally.[2]
Avalara was co-founded in 2004 by Scott McFarlane and Rory Rawlings, starting as a U.S.-focused provider of digital sales tax compliance solutions from Bainbridge Island, Washington.[1][2][3][5] McFarlane, with over 30 years of entrepreneurial experience, had previously launched Lifecycle—a pioneering computerized exercise bike—while at Claremont McKenna College with roommate Augie Nieto, and led ventures like Aircoa and MetaInfo (sold to Check Point).[1][2] The idea emerged from recognizing tax compliance as a distracting, error-prone necessity with no business upside, pitching SaaS automation in an era skeptical of cloud tech for finance.[2][6] Early traction built around AvaTax, launched in 2004, which expanded from sales tax to VAT, excise, and global taxes; a pivotal moment came with the 2018 IPO just before the Wayfair ruling, accelerating demand and propelling Avalara to top stock status in 2019.[2][5]
Avalara stands out in tax compliance through superior automation, accuracy, and integration:
Avalara rides the wave of digital transformation in compliance, fueled by ecommerce growth, remote sales (post-Wayfair 2018), and global regulatory complexity like VAT/GST expansions. Timing is ideal: as transaction volumes explode online, manual tax processes create risks and distractions, positioning Avalara's automation as essential for scaling businesses.[2][6] Market forces favoring it include rising indirect tax enforcement, cloud adoption, and SaaS demand in fintech—areas where Avalara pioneered disruption despite early skepticism.[2][6] It influences the ecosystem by enabling thousands of companies (including B2B) to prioritize growth over compliance, integrating with major platforms and setting standards for accuracy and speed in a $500B+ global tax tech opportunity.[3][5][7]
Avalara is primed for expansion as a privately held leader under Vista Equity, leveraging its global footprint and 4,900+ workforce to deepen AI-driven automation and international coverage. Trends like real-time tax reporting mandates, cross-border ecommerce surges, and regulatory harmonization will amplify demand, potentially pushing it toward unicorn-scale dominance in compliance platforms.[2][7] Its influence may evolve by powering "every transaction worldwide," influencing standards in fintech and enterprise software while sustaining high growth through integrations and innovation—reinforcing its role as the go-to for tax compliance done right.[1][2]
Avalara has raised $172.0M across 4 funding rounds. Most recently, it raised $96.0M Series D in September 2016.
| Date | Round | Lead Investors | Other Investors |
|---|---|---|---|
| Sep 1, 2016 | $96.0M Series D | American Express Ventures, Arthur Ventures, Battery Ventures, Bessemer Venture Partners, Costanoa Ventures, Emergence Capital, Ann Winblad, Jackson Square Ventures | |
| May 1, 2014 | $26.0M Venture Round | American Express Ventures, Battery Ventures, Bessemer Venture Partners, Costanoa Ventures, Emergence Capital, Ann Winblad, Jackson Square Ventures | |
| Feb 1, 2014 | $30.0M Series C | American Express Ventures, Arthur Ventures, Battery Ventures, Bessemer Venture Partners, Costanoa Ventures, Emergence Capital, Ann Winblad, Jackson Square Ventures | |
| Jun 1, 2012 | $20.0M Venture Round | American Express Ventures, Battery Ventures, Bessemer Venture Partners, Costanoa Ventures, Emergence Capital, Ann Winblad, Jackson Square Ventures |
