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CASE STUDY
Avalara, automated tax-compliance software

Avalara automates the complexity of calculating, collecting, reporting and remitting taxes–streamlining an increasingly regulated environment.

Background:

Prior to Battery’s 2012 investment in Avalara, the company was not actively seeking financing. However, with a customer base consisting of tens of thousands of users and calculated sales, VAT and use taxes on nearly a billion transactions per year, Avalara faced an opportunity to reach into additional verticals and expand its customer base. Battery convinced the Avalara management team that by partnering with the firm and taking on additional capital it could solidify its leadership position in the market–both through investing more heavily in organic growth and by continuing its acquisition program.

Battery’s Impact:

  • Since Battery’s investment, Avalara has completed more than 15 acquisitions, which expanded the company’s customer base and functionality into adjacent verticals.
  • Ahead of its 2018 IPO, Battery helped Avalara coordinate two additional rounds of financing in 2014 and 2016 to further accelerate growth.
  • Battery continues to actively engage with Avalara, holding a board seat and leveraging its portfolio-services team to find key management hires and prospective customers.

Outcome:

Avalara completed an IPO in 2018 (NYSE: AVLR); as of 2020, the company’s market cap was roughly $12 billion. Since Battery’s initial investment, Avalara has experienced more than 16 times growth in its yearly revenue–from about $30 million in 2012 to over $500 million in 2020.

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Avalara Related ARTICLES

The presented case study investment was made in particular economic and market conditions. There can be no assurance that Battery Venture would elect, or be able, to exploit similar opportunities in a similar manner under similar or different economic and market conditions. More generally, there can be no assurances that the Battery vehicles will have comparable investment opportunities in the future. No assumptions should be made that any investments identified above were profitable. It should not be assumed that recommendations made in the future will be profitable or comparable to the portfolio company described in this case study. For a full list of all Battery Ventures investments, please click here.

Details
Focus area
Application Software
INVESTED
2012
STATUS
NYSE: AVLR
Location
Bainbridge Island, Washington
STAGE
Growth
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