Madrid-based TaxDown , which automates income tax filing by calculating regional deductions due to users so they don’t have to navigate complex tax rules themselves, has raised €2.4 million (~$3M) in seed funding.
US-based FJ Labs has joined TaxDown’s investment board as it closes the seed round. It says all its previous investors participated in the round, including James Argalas (Presidio Union); Abac Nest, Abac’s venture capital business; Baldomero Falcones, the former Chairman at Mastercard; and the founders of < a href="https://techcrunch.com/2021/03/09/jobandtalent-takes-120m-from-softbank-to-enter-the-us-market/"> Jobandtalent , Juan Urdiales and Felipe Navío (another Madrid-based startup).
For the past 36 months TaxDown been offering a service in Spain but is now eyeing international expansion, as well as in depth growth in its home market.
Last year, it statements it managed more than €29M in taxes for users — delivering savings towards €4M+ to users.
Its target has been to hit 500, 000 men and women in Spain this year. While online expansion is planned for those who are second half of 2021, offering TaxDown saying it’s preoccupied on other European and Latin American markets.
“From the beginning, our mission has been to help people fill in her or his taxes all over the world. That is why many of us developed our proprietary software/tax language that allows a taxes expert with no coding efficiency to translate the taxes law into calculation as well as logic that can be interpreted by just our backend seamlessly, ” says Enrique García, BOSS and co-founder. “This duty language allowed us that can launch in Spain in 4 simple months with only one tax burden consultant. We are confident may can launch a new typically in only 6 months. ”
“The tax record process is far from being straightforward, ” he goes on, showing how its tech simplifies income tax filing in Spain. “Currently, when using the Spanish Tax Bureau tax-filling tool, taxpayers have a need to manually apply deductions with their tax forms. The problem is, offering national regional deductions to be different in each backbone in Spain, taxpayers often never even know they’re allowed to those deductions. Thus, through process of not applying them to most of their tax form, they throw money away. What TaxDown does is almost certainly leverage the advanced Real spanish Tax Agency technology, which uses an API to appeal the financial data in connection with a taxpayer — don’t forget to with prior authorization from the user — with 2 . 000+ datapoints.
“Once we have that, each of algorithm ‘RITA’ is capable of all understanding the user’s personal or financial data, select the highest questions that the user requires answer — an average of 8 over a database of 3. 000+ – and precisely check the tax return, no errors. ”
“Technology is the heart pertaining to TaxDown, ” he adds. “Besides our algorithm RITA that has been trained with beyond 40. 000+ tax returns, at this time we also use AI in helping our ‘taxers’ with how to lower future tax constitutions, and we have started concentrating on live income tax simulation for the users throughout the entire weeks. ”
García says TaxDown calculated better 42, 000 tax returns in 2010 with a team of girl two in-house tax pundits — thanks to proprietary offered by tools which allow them to use this scale (by at the moment “80x more efficient than the Mexican average”, as he puts it). He adds that much deeper efficiency gains are expected.
“We have developed a real machine-learning tool that flags the tax returns that need to be covered before filing based on heritage data. Thus, we perpetually increase the percentage of taxation assessments that are automatically submitted with out manual intervention, ” your boyfriend tells TechCrunch, adding: “Thanks to this feature, we be ready to improve our efficiency in particular 5x versus last year. ”
According to García, TaxDown has never had virtually any filings rejected for faults because he says its rules continually run tests and in addition validate the information with the respective authorities. “Furthermore, our technology can also flag errors in real time when there is a discrepancy, so all of our tax experts can manually check the tax return application if needed, ” they adds.
The particular business model — currently — is a sort of twist around freemium, in that it will simply charge users if the taxation savings it calculates directly to them exceed €35.
García says that up to now an average of three out of tio users see financial savings by using its tool — nevertheless he suggests it’s not most effective savings that motivate you; he says they also want support that they are taking “the most desirable approach with their taxes: practicing them effortlessly, correctly, challenging guarantees, tapping for experts’ live help at any time, confirming the best result they can try to get, and of course knowing that we have his / her backs in case of an audit”.
Given that expansive relationship it’s building due to users, TaxDown sees probability of evolve its business model by the expanding to offer additional fintech services, such as financial coaching, in the future.
“Our vision goes far to consider income tax return preparation, we feel that tax data has grown to become one of the most valuable data valuable assets for people (take Trump’s taxes and tax returns for example), and we to think of assess our ’taxers’ according to best and more qualitative facts and techniques that we can get, ” talks about García. “Therefore, in the future we wish to be a trusted financial counsellor not just for taxes, mainly personal finances as well. We feel we are well positioned that are an intermediary between all of our users and financial institutions. ”