Sales tax automation company Avalara announced Thursday it has landed $96 million in funding from Warburg Pincus, Sageview Capital, Technology Crossover Ventures and others. The funds include $50 million for acquisitions and growth, and another $46 million to repurchase shares from early investors.
In an interview with GeekWire, Avalara CEO Scott McFarlane said the company will continue to grow in the U.S. and internationally, and it has now raised more than $300 million since its founding in 2004. McFarlane also hinted at the possibility of a future initial public offering.
“We continue to look to the future,” said McFarlane, who was named GeekWire’s CEO of the Year in 2015. “There are lots of great companies that are building great things that have taken the step to be public. I think that’d be a terrific outcome for Avalara someday if all the cards came together.”
Referencing the additional $46 million, McFarlane said the company has bought back shares from early investors a couple of times during its history. “There’s no greater feeling you have when you start a business, you bring in all friends and family, and then you give them a chance to take money off the table and profit from their investment,” McFarlane said.
Avalara automates the process of sales tax collection for retailers across different jurisdictions. Growth for the company means entering new tax arenas, and that often comes through acquisitions. In its history, Avalara has bought 17 companies, including EZtax, SuitePlus, HotSpot Tax and others. For every industry and every municipality Avalara enters, it has to understand tax codes and laws. Acquisitions bring people and companies under Avalara’s umbrella that already understand local and industry rules and regulations.
The growing company earlier this year decided to spring for new digs and lease approximately 100,000 square feet across the top six floors of a yet-to-be-completed tower at 255 S. King St. near CenturyLink Field. By 2018, the company’s employees will consolidate at the new building, which will have Avalara’s logo displayed and be called “Avalara Hawk Tower.” Over time, Avalara has an option to lease even more space in the 210,000 square-foot tower, which is part of a new Stadium Place development.
Avalara has about 1,100 employees around the world, including approximately 500 in Seattle. The company also has a presence in the United Kingdom, India, Belgium and Brazil.