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Posted by Richy George on 7 April, 2021This post was originally published on this site
Artificial intelligence has become a fundamental cornerstone of how a lot of business software works, providing a useful boost in reading, understanding, and using the often-fragmented trove of data that organizations generate these days. In the latest development, an Israeli startup called Blue dot, which uses AI to help companies handle their tax accounting, is announcing $32 million in funding to continue its growth, specifically addressing the demand from companies for more user-friendly tools to help read and correctly itemize expenses for tax purposes.
“The tax sector is very complicated, and we are playing in a very large space, but it’s a huge revolution,” Blue dot’s CEO and co-founder Isaac Saft said in an interview. “Business and enterprise accounting is just not going to look the same in the future as it does today.”
The funding is being led by Ibex Investors in partnership with Lutetia Technology Partners, with past investors Lamaison Partners, Viola and Target Global also contributing. Blue dot rebranded only last week from its original name, VATBox (part of the funding will be used to help Blue dot move deeper into the U.S. market, where the concept of VAT is not quite so ubiquitous: there is no national sales tax and states determine the rates themselves).
Pitchbook notes that under its previous name, the startup last raised money in 2017, a $20 million Series B led by Viola at a $120 million post-money valuation.
While Blue dot is not disclosing valuation today, it’s likely to be significantly higher than this based on some of its engagements. In addition to customers like Amazon, tobacco giant BAT and Dell, it also has a partnership with one of the bigger names in expense accounting, SAP Concur, which uses Blue dot to power its expense data entry tool to automatically read charges and figure out how to itemize them so that employees or accountants don’t need to go through the pain of that themselves.
As Saft describes it, part of what is propelling his company’s business is the bigger trend of consumerization and the role that it has played in enterprise services: the working world has picked up a lot of technology tools, led by the smartphone, to help them organize their personal lives, and a lot of what they are being “served” through technology is increasingly personalized with lower barriers of entry, whether its on e-commerce sites, entertainment or social media. In the working world, they can often be frustrated as a result with how much work something like expenses can involve — a process that gets ever more complicated the more strict tax regimes become.
Blue dot’s approach is to essentially view the tax accounting process as something that can be improved with AI to make it easier for people to use — whether those people are workers itemizing their expenses, or accounts auditing them and running those through even bigger accounting processes. With a machine learning system that both takes into account a company’s own internal compliance and company policies, and the wider tax and regulatory framework, Blue dot helps “read” an expense and figure out how to notate it, how much tax should be accounted and where, and so on.
This is especially important as the process of entering and managing expenses gets pushed out to the people spending the money, rather than dedicated accountants handling that work on their behalf. An awareness of how modern offices are functioning today and evolving is one reason why investors were interested here.
“We believe Blue dot can change the way organizations worldwide manage accounting and its tax implications for their expenses,” Gal Gitter, a partner at Ibex, said in a statement. “There’s been a major market shift away from centralization of enterprise functions, including procurement. As that accelerates, more companies will be looking for ways to replace costly and complex manual processes with digital, automated solutions that use data and AI to essentially enable transactions to report themselves, which Blue dot delivers.”
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