The deadline to file taxes is coming up, meaning accountants will have a pile of work in the coming weeks. Canopy, a startup that provides the software tax professionals use to streamline their work, announced today a new round of $20 million.
Certified public accountants (CPAs), enrolled agents, and tax attorneys use Canopy for various purposes. “Canopy is a hybrid of fintech and regtech,” wrote founder and chief executive Kurt Avarell in an email to VentureBeat. From smart tax analytics to online invoicing and Internal Revenue Service (IRS) transcript reporting, the software is versatile.
“Professional tax software has been in the stone age for so long that there’s a yearning among accountants for better software and a better experience,” wrote Avarell. “Like the rest of us, accountants use consumer apps that are fantastic to use and easy to navigate. But when they return to work, they use clunky, outdated software, much of which was built in the ‘90s.”
Avarell claims to have thousands of customers who pay on a per user, per month basis for Canopy’s software as a service (SaaS).
But taxes are certainly nothing new, which means there are many other options available to help navigate them. Avarell cites manual tools like Microsoft Excel and Adobe Acrobat as competitors, but also startups that specifically target the tax system. “What TurboTax did for consumer tax preparation, Canopy is doing for professional tax workflow,” he wrote.
The chief executive is a former tax attorney for traders and brokers on Wall Street — he shifted gears to provide a solution to professionals around the country. When asked about President Trump’s tax plans, he replied: “For everybody’s sake, we hope this new administration simplifies the tax code. A simpler tax code means happier Americans, and of course less coding for us!”
Pelion Venture Partners led today’s funding round, with participation from existing investors New Enterprise Associates (NEA), Epic Ventures, and Deep Fork Capital. Since founding his startup in 2014, Avarell has raised a total of $30 million. Canopy will use the new money to accelerate growth and build additional products.
Based in Lehi, Utah, Canopy has approximately 60 employees.