We raised
$60 million
to expand our global tax automation platform
July 21, 2022
  • Our global digital tax solution helps customers including Uber, Zoom, Booking.com, Spotify and Teachable seamlessly remain tax compliant
  • Funding follows impressive 7x revenue growth in 2021 and will allow the us to double in size by the end of 2022, with a focus on improving the platform’s geo coverage
  • Demand for our taxation services has grown as COVID-19 pandemic prompted an e-commerce boom with online payments expected to reach $8.5tn in 2022

July 21, 2022: We have raised $60 million to expand our global tax solutions. Investors in the Series B funding round led by Coatue include Dawn Capital, Index Ventures, OMERS Ventures, FJ Labs, Moving Capital.

The funding, which comes just six months after a $20m Series A round, underlines the success we have had in transforming the way digital companies including Uber, Zoom, Booking.com, Spotify, Teachable and Remote.com stay tax compliant. Our platform is the first digital tax solution with global coverage, providing a plug-and-play modular platform that helps businesses convert a costly and complex process into an automatic and seamless one. Using a simple API solution, we determine and calculate the right amount of tax a business should pay, in the right place, at the right time. This results in greater profitability for customers who can reduce their operating costs and increase their tax compliance at the same time.

A one-stop solution for global digital businesses

Fonoa was founded by three Uber alumni - Davor Tremac, Filip Sturman, Ivan Ivankovic - who experienced first-hand how difficult it is to correctly calculate and report taxes to authorities throughout the world. The existing crop of tax software solutions have not been built for the digital age and require clients to bring on armies of implementation consultants on projects that could take many months to complete. Equally, software developers for these solutions don’t always understand how digital-first businesses operate around the world, meaning customers can’t quickly adapt a tool to their needs in specific countries. They built Fonoa from the ground up and developed a plug-and-play platform that allows customers to automate all relevant aspects to ensure tax compliance globally.

Where previously customers would purchase goods and services within their own country and the company they purchased from would send the VAT to the Government, the growth in companies selling their products and services worldwide has seen governments lose substantial amounts of tax revenue. The OECD estimates that countries around the world on average struggle to collect 44% of these taxes, leaving them with a massive VAT gap in their budgets each year which they are desperate to close. As a result, more than 90 countries across the globe have introduced complex tax rules for digital transactions, shifting the liability to businesses and placing an increased responsibility on them to calculate, collect and remit their taxes globally.  

We take the hassle out of all these changes and makes it easy and efficient for digital-first companies to understand, report and abide by the tax obligations in every country they work in. Our platform verifies the tax status of the buyer and seller, calculates the correct tax to charge and creates a locally compliant invoice after a transaction takes place, while also providing real-time reporting to a country’s government.

E-commerce boom increases demand

The demand for our services has only increased - with the company experiencing 7x revenue growth across 2021 - as the COVID-19 pandemic prompted a transformative shift in e-commerce shopping habits. With taxes part of almost every online payment, more and more businesses are set to benefit from our platform, as online payments are expected to reach $8.5tn in 2022.

To serve this demand, we will use the funding to improve the features of our product and continue our global expansion. We will also launch new products in the next 12 to 18 months. To do this, we - the company which has increased its headcount by 5x in the last 12 months to 110 employees across 20 countries and 35 nationalities - will double in size by the end of the year with a focus on engineering and sales. With new employees joining from companies such as Airbnb, Netflix, Meta, EY, Deloitte and PwC, we will be able to embed this knowledge and tailor our platform even further to suit more business models and industries including SaaS, the gig economy and content creation.

Davor Tremac
CEO and co-founder at Fonoa

As we’ve grown as a business we’ve seen a number of companies wishing to reduce the cost of their operations and improve profitability when it comes to managing their indirect taxes. At the same time, we’ve seen countries across the globe try to close their VAT gaps through new regulations and so there has been heightened demand for companies to increase their compliance. Fonoa is the only tax software solution built for the digital age and means that companies can focus on what they do best while we make sure they charge the right amount of tax, in the right place, at the right time. We’re delighted that Coatue and our other investors have backed our vision and can see the great opportunities that lie ahead of us in 2022 and beyond.

Lucas Swisher
General Partner at Coatue

As more companies start global-first, tax compliance becomes increasingly important. However, managing, processing and reporting taxes is cumbersome and complex. From the moment we met Davor, Filip, Ivan and the rest of the Fonoa team, we were struck by the simplicity and effectiveness of the Fonoa platform to turn a complex process into a seamless one. Coatue is thrilled to support Fonoa as it scales its platform to meet the increasing demand for tax compliance solutions.

Hannah Seal
Partner at Index Ventures

Dealing with taxes is a bureaucratic maze for companies operating in a single country, let alone building an international business with customers around the world. Fonoa makes it straightforward. Companies stay compliant and don’t have to deal with the ever-increasing complexity of international taxes. It’s a no-brainer for any digital business operating across borders.

Jambu Palaniappan
Managing Partner at OMERS Ventures

It was clear to us when we did our first investment in Fonoa that the team has built a brilliant platform that solves a genuine (and growing) problem – in an extremely user-friendly way. It comes as no surprise that the team has been so disciplined and successful in executing its vision to build a substantial global business. We are proud to play a continued role in the journey.

Mina Mutafchieva
Partner at Dawn Capital

Scaling across borders is a challenge for any size of organisation and controlling costs has never been more important. Being able to enter new markets with complex tax regimes using Fonoa’s automated tax compliance, is of great value to any size of business, saving both cost and time and providing invaluable governance support in a digital world. We are really pleased to be able to support Fonoa’s world class team and I look forward to working with Davor, Filip, and Ivan to continue adding exceptional talent to the company's ranks and bringing the technology to companies globally.

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