Seattle-based Avalara is getting a large cash infusion as its business continues to benefit from the e-commerce boom and increasing regulatory obligations.
Avalara said last week that it added $959.9 million to its cash balance after issuing short-term debt in the form of convertible senior notes, according to a filing.
The money will be used to fuel the company’s compliance automation software that helps more than 30,000 companies across 95 countries manage their sales and other types of taxes. Customers include companies such as Zillow, Pinterest, Converse, Roku, Thule, and others.
The pandemic-driven rise in online shopping and new tax rules, along with the continuing adoption of cloud services, have helped provide tailwinds for Avalara’s business. Its stock has increased more than 3X since its public market debut in 2018, and is up more than 30% since May. The company’s market capitalization is now more than $14 billion.
Avalara reported $169.1 million in revenue for the second quarter of 2021, up 45% year-over-year, its highest growth rate since the 2018 IPO.
On the earnings call with analysts, Avalara CEO Scott McFarlane called it a “gold medal quarter.” He said the company’s vision is to “be part of every transaction in the world.”
To do that, Avalara is investing heavily in new technologies and products, with about 25% of its employees working in R&D. The company employs more than 3,330 people worldwide.
“We believe we are outpacing the competition and driving the future of global compliance,” McFarlane said.
Founded in 2004, Avalara has also been on an acquisition spree of late, swooping up companies including DAVO Technologies, Business Licenses, Transaction Tax Resources, INPOSIA Solutions, and Impendulo Limited.
For full year 2021, Avalara expects revenue between $672 million and $676 million — up from $500.6 million in 2020 — and a non-GAAP operating loss between $10 and $14 million.
