Loctax Raises $12m in Series A Funding to Give Companies Full Control of Tax Risks and Responsibilities
- Loctax provides a single source of truth for tax teams to manage and collaborate across all tax functions
- Despite a slew of new tax solutions being launched in recent years, none have taken the holistic approach to tax management that Loctax provides
- Companies are facing increasing tax regulations and greater calls to demonstrate robust governance, but many businesses are hampered by transparency and collaboration challenges: Loctax’s workflow tools solve this
- The $12m in Series A funding is being led by Index Ventures with support from Cavalry Ventures, Seedcamp and prominent angels including the CFO of Revolut and the CEO of Checkout.com
By Hannah Seal, Partner
There’s little question that tax is one of the major issues of the moment. Governments are clamping down hard, while the increasing multinational nature of even the smallest of businesses makes managing tax a constant, and often losing battle. It’s why there has been a slew of new platforms and APIs launched in the past decade: at Index, we’ve already invested in some of them.
But while the current crop of new solutions focus on indirect sales taxes, tax codes and tax compliance, there hasn’t been a clear innovation in productivity and management tools to deal with direct taxes. Instead, the status quo remains: tax teams sitting at the centre of a complex spider’s web between finance, legal and HR, while depending on email and spreadsheets. Documents are stored all over the place using inconsistent systems – a problem that’s made worse by tax teams having a notoriously high churn rate.
Loctax solves all of this by providing a single source of truth for global tax teams to collaboratively handle reporting, compliance, governance, reporting, accounting, transfer pricing, legal and more. No matter how the company or personnel change, everything is stored and recorded in Loctax. It’s a supercharged productivity platform just for tax, that greatly removes risk.
The moment is now for fixing tax, and Loctax shows that there’s still plenty of space for innovation. By offering teams a single source of truth, which existing and new specialist tools will ultimately plug into, Loctax has an opportunity to be the default tax management platform for every company.
The last decade has seen a major shift in expectations around tax from governments, regulators and the public. Meanwhile, post-COVID, governments across the world have huge budget deficits, are increasing their focus on recovering more tax revenues, and are intensifying the focus on global companies. It’s resulted in far more complex tax rules across individual countries and states – and with them greater potential for mistakes, fines and reputational damage to companies.
Globally, there’s increasing pressure on governments to improve tax transparency and respond to public expectations around how companies should behave. It has resulted in the emergence of new initiatives such as the OECD’s BEPS framework to establish a global minimum tax for multinational enterprises, while clamping down on tax avoidance.
Yet despite all these developments, many tax teams are still mired in legacy technology. Without reliable collaborative management tools, crucial tax information is too often not visible to teams across countries, many of which have different reporting requirements. Information which teams need in order to confidently meet regulations is often siloed and overly reliant on key individuals, increasing the risk of critical incidents.
Loctax’s platform solves so much of this: it combines up-to-date company data, international tax rules, visual intelligence, and collaboration tools to help companies achieve total control of their tax governance. It provides companies with the technical ability to evaluate and respond to a fast-changing global tax landscape.
Founded in 2020, Loctax’s leadership team combines decades of experience in technology, in-house tax practice, law and consultancy. The company was born out of experiencing these issues first hand while two of the co-founders were working at Avnet, a global technology solutions company: CEO Hans Kayaert served as General Counsel while COO Stevi Frooninckx worked as Group Tax Project Manager.
“Companies are under more pressure than ever to meet growing tax reporting and regulatory requirements as well as the expectations of stakeholders to show they are doing the right thing,” explains Kayaert. “Currently there’s no shared concept in how companies and regulators talk about tax, and no straightforward way for tax teams to be confident that they’re meeting all their obligations.”
Now, with a new round of $12m in Series A funding, the company is set to grow its team in the UK and EU, and expand its partnerships with the tax and professional advisory sector.
Published — Sept. 21, 2022