US crypto tax startup TaxBit to channel $100M raise into UK expansion

Major cryptocurrency tax compliance startup TaxBit has raised $100 million as it expands into Europe.

According to a March 3 blog post, TaxBit has secured the funds in Series A round led by Paradigm and Tiger Capital. Additional investors included PayPal’s venture arm, major industry firms like Coinbase and Winklevoss Capital, as well as individual investors like Bill Ackman, Ryan Smith, Anthony Pompliano and others.

According to the announcement, the new investment round comes in response to the increasing global demand for crypto services amid the crypto industry’s parabolic surge to hit a $1.5 trillion market capitalization. “The importance of TaxBit’s tailored tax and accounting software is readily apparent,” TaxBit’s vice president of marketing, Michelle O’Connor, said in the blog post.

With newly raised funds, TaxBit is planning to start to expand internationally in 2021. TaxBit CEO Austin Woodward told Forbes the company wants to tap the United Kingdom market as its first destination. The company is also expecting to launch an enterprise resource planning solution in compliance with the United States Securities and Exchange Commission later this year.

Launched in 2018, TaxBit’s platform is designed to automate aspects of crypto tax compliance for enterprises, consumers and governments. Developed by a group of CPAs, tax attorneys and software developers, the solution enables users to track the tax impact on their trades on crypto exchanges.

TaxBit's raise comes as the U.S. Internal Revenue Service updates its crypto reporting rules to clarify that investors who purchased crypto with fiat currency do not need to report their transactions under the “virtual currency” question.