The start-up has become a unicorn.
(Photo: Taxfix)
Frankfurt App instead of tax consultant: Start-ups simplify the complicated filing of a tax return with digital solutions. The idea inspires not only users, but also investors.
As the Handelsblatt learned exclusively from Taxfix, the largest German tax start-up has raised 220 million dollars in fresh capital. It is the largest transaction in the German start-up market so far this year. With the cash injection, the company’s valuation climbed above the prestigious threshold of one billion dollars. In technical jargon, Taxfix is now considered a “unicorn”.
According to Christian Stender, Head of Tax Innovation & Technology at the auditing firm KPMG, the increased rating of Taxfix reflects the fact that the market for taxtechs is not yet mature. According to the expert, tech companies that digitize the topic of taxes still have a lot of potential.
The start-up Taxfix has translated the tax forms, which are difficult to understand, into a simple questionnaire that users can answer on their cell phones or PCs within around 20 minutes. Based on the data, Taxfix fills out the tax forms and sends them electronically to the tax office.
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Taxfix is on an expansive growth course and is now not only active in Germany, but also in Italy, France and Spain. The young company has been making losses since it was founded: at the end of 2020 there was a loss of 32.5 million euros, the result for 2021 has not yet been published. But investors believe in success.
OTPP, Valar Ventures, Creandum and Redalpine give money
In recent years, Taxfix, which Mathis Büchi and Lino Teuteberg founded in 2016, has already collected more than 110 million euros. With the fourth round (Series D), double the amount is now flowing into the start-up again. The largest stake comes from Investor Teachers’ Venture Growth (TVG), the venture capital arm of the Ontario Teachers’ Pension Plan (OTPP). The previous Taxfix investors Valar Ventures (Peter Thiel), Creandum and Redalpine are also involved in Series D.
“We are incredibly proud to have a long-term partner in TVG who shares our vision,” says Taxfix CEO Martin Ott. The former Facebook manager was hired by Taxtech in Berlin in August. Shortly before, Taxfix had brought Deutsche Bank finance manager Franziska von Arnim on board, just like Björn Heckel, who had previously worked for Uber and Intuit, one of the largest tax and financial software companies in the world.
The pension fund OTPP has an investment volume of almost 250 billion Canadian dollars and has already invested in the mail order company Zalando, the space company SpaceX, the game manufacturer Epic Games and the crypto exchange operator FTX Trading.
“Like Taxfix, Ontario Teachers’ aim is to provide people with a secure and stable future with our offer,” explains Avid Larizadeh Duggan, Managing Director of TVG, who will join the Taxfix Advisory Board at the same time as the investment. We look forward to working towards realizing the company’s vision “and making it easy, affordable and fear-free for everyone to file taxes and manage personal finances”.
Taxfix will in future offer an immediate payment of the tax refund
Taxfix wants to use the money to expand further and offer an immediate payment. In the future, customers will be able to receive 50 percent of the expected tax refund immediately and free of charge.
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According to the Federal Ministry of Finance, German taxpayers paid an average of 1,051 euros too much to the tax authorities each year. However, half of them donate this money to the tax authorities because they don’t want to go through the trouble of filing a tax return. Taxfix and its competitors Taxando, Expresssteuer, Wundertax, Lohnsteuer Kompakt, Steuerkäpt’n and Steuergott have targeted these taxpayers. As long as the German tax authorities do not send out pre-filled tax returns for private individuals based on the data already collected, as is common in Scandinavia, for example, there will still be room for digital solutions such as Taxfix, predicts KPMG expert Stender.
In addition to Expresssteuer, the Taxtechs Accountable and Taxdoo, which specialize in self-employed people and companies, have recently collected fresh money. “We are currently observing a great deal of investment in the digitization of the tax area, since tax returns are becoming increasingly demanding,” explains Stender.
More: Taxfix, Wundertax, Steuerbot: The apps are good for tax returns