Spark, Khosla, Sequoia back startup bringing AI to sales tax collection

Investors are betting on new software tools to grapple with one of the thorniest problems in business and life — taxes. 

Anrok Inc., a startup helping software companies automate sales tax compliance, has raised $55 million in a Series C funding round, more than doubling its valuation to $525 million, the company told Bloomberg. Spark Capital led the round, with participation from Sapphire Ventures, Khosla Ventures, Sequoia Capital and Index Ventures. Anrok’s customers include a number of fast-growing AI startups, like Anthropic, Mistral and the AI coding company Cursor.

Co-founder and chief executive officer Michelle Valentine previously worked at Index Ventures, where she focused on artificial intelligence investments. During her stint as a venture capitalist, she said she realized that most tax solutions were designed for retail businesses, not for high-growth, globally distributed software companies. 

The problem became more dire after the 2018 Supreme Court ruling in South Dakota v. Wayfair Inc., which required businesses to collect sales tax even without a physical presence in a state. For many tech companies, the decision introduced a complex web of tax obligations across multiple jurisdictions. Then came the pandemic. Remote work accelerated the dispersion of teams across state and national borders, making tax compliance even more challenging for remote companies.

Valentine launched Anrok in 2020 to help streamline the process of collecting sales tax with an AI-powered platform that monitors obligations, calculates taxes and files returns automatically. “Scale and speed in real time is what matters when it comes to getting tax right,” Valentine said. “If you’re using a legacy solution built for retail, not for the speed and complexity of today’s AI companies, there’s a real cost to your bottom line.”

AI startups in particular “use Anrok because we can keep up with their crazy growth and global scale,” Valentine added.