Numeral Secures $35 Million in Series B to Automate Sales Tax Management with AI
Sam Ross, co-founder and CEO of Numeral, conceived his sales tax compliance startup while globetrotting after his tenure as a product manager at Airbnb. In an interview with TechCrunch, Ross recounted that this was in early 2018, a time before remote work became widespread. Driven by the popularity of direct-to-consumer businesses, Ross supported his travel ambitions by running several self-funded e-commerce brands from abroad, including an online jewelry store and a vitamin D platform.
Despite enjoying the independence these ventures afforded, Ross was consistently frustrated by the cumbersome and bureaucratic sales tax processes for his products. Prior to 2018, e-commerce and SaaS companies weren't required to collect sales tax in states without a physical presence. However, the Supreme Court's 2018 decision in South Dakota v. Wayfair changed that landscape, mandating tax collection wherever customers are located.
Ross explained, "Suddenly, I went from handling tax collection in California to over 40 states, which was overwhelming." His frustrations and experiences inspired the creation of Numeral—a platform designed to automate sales tax compliance.
Encouraged by Y Combinator partner Gustaf Alstromer in 2023—his former boss at Airbnb—Ross set out to develop a solution that handles all facets of sales tax management. Recently, Numeral announced a significant funding boost, raising $35 million in Series B, valuing the company at $350 million. This round followed an $18 million Series A just six months prior, led by Mayfield, with participation from Benchmark, Uncork Capital, Y Combinator, and Mantis, the VC firm founded by The Chainsmokers.
While numerous software options exist for sales tax management, Ross sees AI as a game-changer that can emulate human accountants by managing regulatory changes across over 11,000 jurisdictions, handling mail and filings, and autonomously paying taxes on behalf of clients. Since most sales tax laws are clear-cut, AI can operate with minimal risk of errors or hallucinations.
He highlighted, “Some laws are quite peculiar. For example, in New York, a whole bagel is tax-exempt, but if you cut it in half, it’s taxable—our AI is aware of such nuances.” Today, Numeral’s AI engine tracks thousands of these idiosyncratic laws—an essential feature for global clients.
Over the past year, Numeral has increased its revenue 3.5 times and now supports over 2,000 clients, including notable brands like EightSleep and Graza Olive Oil. Although sales tax compliance appears niche, several startups like Anrok and Zamp compete in this space, with Vista Equity Partners' Alavara, a 26-year-old incumbent, expected to go public later this year.
Ross emphasizes that Numeral’s international reach sets it apart: “We file taxes in markets like Tanzania and Kenya—regions where businesses traditionally relied on local CPAs.” This global approach underpins Numeral’s growth strategy and technological innovation.
By Marina Temkin, TechCrunch Email: marina.temkin@techcrunch.com Signal: +1 347-683-3909