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The New York Stock Exchange welcomes Avalara, Inc. (NYSE: AVLR) in celebration of their IPO. Scott McFarlane, Co-Founder and CEO, joined by NYSE COO John Tuttle, ring The Opening Bell®. (Photo via NYSE)

Update: Shares of Avalara were up 87 percent on the first day of trading, at $44.94.

There was an orange crush on the floor of the New York Stock Exchange today.

It was easy to spot Avalara’s employees and board members on Friday morning as the sales tax automation company known for its quirky orange-clad culture rang the opening bell in New York City, marking a major milestone for the 14-year-old Seattle-based organization.

Avalara CEO and co-founder Scott McFarlane has worn orange for more than 4,000 consecutive days. Friday was no different.

“When I woke up this morning and dawned my orange jacket today, it gets surreal,” McFarlane told GeekWire after he rang the bell.

When McFarlane, Rory Rawlings, and Jared Vogt started Avalara on Bainbridge Island in 2004, they knew that sales tax automation was not the sexiest business. They needed to stand out somehow.

Orange — and island-themed tiki huts — became the answer.

“It’s one of our calling cards,” McFarlane said. “Our employees know it; our partners know it; our customers know it; and our competitors know it. We are a fun company to do business with.”

In a note to employees, customers, and partners, McFarlane noted that “We’re trading under the ticker AVLR. We considered TIKI and ORNG, but they didn’t make the cut.”

Avalara’s setup at the 2015 U.S. Open major golf tournament near Seattle.

While the subject of tax may be boring, it’s become lucrative for Avalara. The 1,500-person company processed 6.7 billion transactions in 2017 and counts more than 20,000 customers across 200 countries who use Avalara’s software to help navigate the often complicated tax processes. Avalara posted revenue of $213 million last year, up from $167 million the year prior.

The company’s tagline is to help customers “make sales tax less taxing.”

“When we started the company, we started it under the knowledge that this concept of sales tax being done manually in a digital world was absurd,” McFarlane said. “We knew that this was inevitable, that this was going to take place and the company would be swimming with the tide.”

Avalara estimates that the addressable market for its services and products in the U.S. is more than $8 billion. McFarlane said the company has only penetrated four percent of the market. The vision is to “be apart of every transaction,” he said.

Some investors are buying into that. After Avalara raised $150 million in its IPO, shares spiked more than 87 percent from its offering price by the end of the first day of trading.

“I always start out discussions and talk about this immense opportunity they’ve probably never heard about, sales tax,” McFarlane said. “It’s certainly not a scintillating party conversation, but investors got the fact that this is a real dynamic business.”

Avalara is riding the trend of more companies selling products online while tax requirements constantly change.

“The patchwork of thousands of jurisdictions, each with its own rates, rules, and boundaries, adds up to a heavy burden for companies to navigate manually on their own,” Chelsea Stoner, a general partner at Battery Ventures (an Avalara investor), wrote in a blog post today. “And there can be a heavy price for getting it wrong when the state auditors call.”

(Photo via Tiffany Lieu/Avalara)

Avalara employs 1,500 people across 12 offices worldwide and recently moved into a new headquarters in downtown Seattle that won Geekiest Office Space honors at the GeekWire Awards in May. It’s one of three Seattle-area companies to go public in the past three months, with workflow management company Smartsheet and e-signature powerhouse DocuSign as the others.

“One of the things I heard on the roadshow quite a bit is, ‘oh my gosh, another Seattle company coming through — what’s in the water up there?'” McFarlane said. “It really is a fantastic string of events for Seattle, which has a really vibrant tech community. Most of the companies are cloud-based, and I think that says something about how we’re going forward with technology in the future.”

This past December, McFarlane wrote a memo to employees that laid out several steps the company would take to address apparent culture issues. Avalara hired an outside law firm to review “internal complaints this year about employees, including executives, drinking to excess at work-related functions and using questionable judgment.”

Since then, the company’s ratings on Glassdoor have slid slightly. But McFarlane said Avalara’s eNPS, or employee net promoter score, has “really gone up.”

“We want to do things better wherever we possibly can,” he said. “I want to lead from the front on this issue because it’s an important issue in our society today and we want Avalara to be a fantastic place to work.”

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