Croatian fintech company Fonoa has raised $25 million, in an investment round that included London-based Index Ventures, Canadian OMERS Ventures, and US-based VC fund FJ Labs among others.
The company, founded in 2020, provides a global tax automation platform, surpassing over 300 million tax transactions per year.
According to the company, while technology is driving trade at an ever-increasing pace, it has become harder for digital businesses to understand and manage global tax and compliance obligations.
This is where Fonoa’s platform comes in, solving the global tax calculation for companies so they can focus on their growth instead.
“We are transforming how digital companies including marketplaces, digital service providers, micro mobility operators, gig economy platforms, and subscription-based companies stay tax compliant; converting a costly and complex process into an automatic and seamless one. We provide a plug-and-play modular platform that helps businesses determine and calculate the right amount of tax, in the right place, at the right time”, the company said in a press release.
This is done by providing a simple API solution that integrates into the workflow of Fonoa’s customers to help handle the full chain of tax reporting.
Then, the 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. Moreover, it allows for automatically reporting transactions in real-time to a country’s government where needed.
Currently supporting tax automation transactions across more than 100 countries, Fonoa will now aim to use their latest funding to expand to over 140 countries by the end of the year.
“Combined with the increased scrutiny by regulators, dealing with tax matters in a more automated and trusted way has become an ever-more pressing issue. We built a one-stop solution that handles the complexities of tax globally, allowing digital businesses to focus on growing their core business”, Fonoa’s CEO and cofounder Davor Tremac points out.
Tremac is one of three Croatian cofounders of the company, together with fellow Uber alumnis Filip Sturman and Ivan Ivankovic. All of them have experienced first hand how difficult it is to correctly calculate and report taxes to authorities throughout the world, and sought to use this experience and set up Fonoa. Having their headquarters in Dublin, Fonoa’s team is spread across 14 countries. They also plan to make more hires in the US, Europe, and Latin America in the upcoming period.
For OMERS Ventures, investing in Fonoa’s platform will prove to be helpful for many businesses around the world.
“Budding entrepreneurs can use hundreds of different platforms to scale their business and accept payments from anywhere, but when it comes to paying the right taxes across different markets, the support is non-existent”, Jambu Palaniappan, managing partner at OMERS Ventures, said in a statement.
In 2020, the global tax automation software market was estimated worth more than $12 billion, with this number projected to grow even more in the next few years.