Sales-Tax Software Seller Avalara Adds $100M from Warburg Pincus

Tax compliance doesn’t sound like the kind of sexy business that makes headlines and gets deep-pocketed investors excited.

It’s a different story when you’re talking about software that can sift through thousands of overlapping government sales-tax districts around the world. When the idea of paying sales taxes on most online purchases in the U.S. seems like it could become a reality, that story gets even more interesting.

That’s where Avalara sits. The Bainbridge Island, WA-based company sells sales-tax software that can plug into e-commerce, accounting, and other kinds of business programs, allowing merchants to automatically calculate how much tax is due on any given transaction.

After years of quietly building a business at its island headquarters outside of Seattle, Avalara has loaded up with private investment in recent years—and today, it’s piling up even more capital with a $100 million investment from private equity firm Warburg Pincus.

The financing—a pretty huge amount of private investment for a Seattle-area technology company—roughly doubles the company’s entire fundraising haul over its 10-year history. It follows a $30 million investment round Avalara raised in February of this year.

The money will be used to expand the company’s footprint, both by adding more international services and acquiring other companies, co-founder and CEO Scott McFarlane said in an announcement. The company now employs more than 800 people at its offices in the Seattle area and other parts of the U.S., along with outposts in London and Pune, India.

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