Fonoa, a Dublin-based startup that helps companies like Uber and Zoom with their tax compliance, has raised a $60m Series B round from some of the world’s most well-known investors, including Coatue, Index and Dawn Capital.
The investment makes Fonoa one of Ireland’s best-funded tech firms.
What does Fonoa do?
Fonoa, set up by three ex-Uber employees, calls itself a one-stop-shop for corporate taxes: it automates taxation processes for ecommerce businesses with an API. Currently businesses that operate across different countries have to deal with complicated and fragmented tax regulations. Fonoa’s platform determines and calculates the right amount of tax to pay, regardless of differing fiscal jurisdictions.
The platform is used by companies such as Uber, Zoom, Booking.com and Teachable.
The company is based in Ireland, but its employees are distributed across over 20 countries and its operations centre is in Croatia; the founders are also Croats.
What’s the market like?
The startup can offer its services on a vast market: with almost every online payment, there’s a tax to be paid. And this sector is growing — online payments are expected to reach $8.5tn in 2022. As tax compliance is usually dutifully enforced by national and international authorities (and any breach of rules can result in big fines), Fonoa’s aim is to take away the complicated regulatory burden from businesses’ shoulders.
- Coatue (new)
- Dawn Capital (new)
- Index Ventures (existing)
- OMERS Ventures (existing)
- FJ Labs (existing)
- Moving Capital (existing)
The last four firms also participated in the company’s Series A — Fonoa raised $20.5m in November 2021.
The company wants to use the funding to improve its existing offer and continue its global expansion. It also wants to launch new products in the next 12 to 18 months and tailor its platform to suit more business models and industries including SaaS, the gig economy and content creation. To achieve this, it eyes doubling in size by the end of the year with a focus on engineering and sales.
The pandemic has strengthened the position of ecommerce services in Europe and elsewhere — and as the sector expands, there’s a growing demand for B2B companies that make their operations smoother in niche areas, like taxation. Fonoa’s growth is proving it: the company experienced seven-fold revenue growth in 2021 and it increased its headcount five-fold to 110 employees over the last 12 months.