With $630 billion worth of retail sales projected to happen in the U.S. during this holiday season, it’s the time of year that governments fill their coffers with tax.
November 30, 2015
Inside Avalara’s Tiki Bar Culture and Cyber Monday Machine
A venture-backed Seattle FinTech company with unique company culture targets Durham for huge expansion.
And there’s one company quickly becoming a technology of choice for easily and accurately calculating those taxes and creating returns on behalf of retailers (and even Etsy shops) everywhere. It’s called Avalara and it’s fast on its way to employing 350 people on downtown Durham’s American Tobacco Campus.
It’s the busiest time of year for the Seattle-headquartered tax software company that opened up shop in Durham less than two years ago. But that’d be hard to believe considering what seems to be constant speed of acquisitions, hires and new clients.
Today, Cyber Monday, the company will process 50 million transactions, representing a 100 percent increase in traffic over the same day last year. The growth is a result of $142 million in private equity raised over the last year, which allowed for acquisitions of a telecom tax compliance company in Kansas City, a European business tax software company from Belgium and lodging tax solutions provider from Denver, along with new vendor partnerships and product announcements. It’s also prompted IPO speculation.
A significant portion of all of that growth is happening in Durham, where a fifth of Avalara’s entire workforce spends its days and where any job open within the company can be housed. It’s also where an entrepreneur with several startups under his belt is running several Avalara businesses and ensuring an office culture that is both mission-oriented and fun, a quality he says is missing from most tax software companies.
Also different, according to Tormollen, is a constant focus on innovation and owning every industry that collects a tax in the U.S., and increasingly globally. In June, a division led by Tormollen began offering online filing to small and mid-sized fuel distributors for the first time. It previously only offered software to large companies in the space.
And in October 2015, the Durham office launched a new product that calculates e-cigarette excise taxes and generates the forms required in Louisiana, North Carolina and Minnesota, the first states to tax e-cigs as tobacco products. At least 17 other states have their own legislation pending, and Avalara wanted to be ready to handle those taxes for clients.
The company has also grown its client base through integrations with vendors like Stripe, which provides payment processing for web and mobile businesses, and marketing/sales software companies NetSuite and Magento. Increasingly, it is competing for the business of Fortune 500 businesses.
Avalara doesn’t seem to be making idle claims. Its CEO Scott McFarlane was voted 2015 GeekWire CEO of the Year in May. And the biggest investor in the business is global private equity giant, Warburg Pincus.
They were certainly enough to lure Tormollen out of Texas. And he expects even more of the executive team to be based in Durham over time.
“As we shift more globally, this office will become more of a central hub,” he says. “Already I interface more with Europe and Brazil than the Seattle office. We’re doubling down on RDU.”