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Tax compliance platform Blue Dot (previously VatBox) today announced it has raised $32 million, bringing its total raised to over $96 million. The firm says it will put the funds toward product R&D and expanding the size of its globlal workforce.
The tax compliance burden for enterprises can be significant. In 2019, half of companies responding to an EY Americas survey indicated that their biggest compliance challenge would be staying current on legislative and regulatory developments. Another 23% said modeling the tax impacts of business and legislative change was their next biggest barrier to overcome.
Blue Dot offers software designed to reduce companies tax liabilities by addressing a few of these challenges. Leveraging a knowledge base, as well as AI and machine learning algorithms, it looks for anomalies in evidence, supplier data, and reports, consolidating data sources and processes into a single workflow and flagging anything that might be amiss.
Blue Dot was founded in 2013 by Isaac Saft and Noam Guzman, who sought to streamline the recovery specifically of value-added taxes (VAT), or taxes levied on products at each stage of production, distribution, and sale. Along with over 100 employees, the two cofounders built a business-to-business software-as-a-service solution that relies on the cloud and automation to ostensibly yield higher returns.
Blue Dots algorithms monitor transactional data across entities and jurisdictions, identifying unclaimed tax returns, avoidable costs, and more. The software extracts, matches, and analyzes invoices, employing an access point for global and local management of corporate tax policies. Using Blue Dot, companies can adjust the strictness of their tax returns based on rulings with local authorities while maintaining regulatory compliance.
For example, Blue Dot can tell customers users how much VAT has been spent across their business, as well as the likely amount of VAT that can be reclaimed by country, date, and expense type. The optimization features of Blue Dot show things like the difference between potential and actual VAT returns, in addition to information on lost VAT refunds.
Our ecosystem combines hundreds of extractors and algorithms, using semantic networks, statistical relationships, anomaly detection, and many other models, a company spokesperson told VentureBeat via email. Blue Dot harnesses the power of AI and machine learning while leveraging external data sources and historical data to create an end-to-end story of each employee-driven transaction. [The companys] architecture ensures the datas integrity via a continuously updated knowledge base of tax rules and a configuration wizard that allows each client to apply their own policies to optimize the end-to-end tax compliance process.
The global tax management market is expected to grow from $15.5 billion in 2019 to $27.0 billion by 2024. Factors driving the climb include an increasing volume of transactions due to digitalization, the complex nature of existing tax systems, and the increased vigilance of tax administrators, according to Markets and Markets.
Blue Dot has 100 employees and claims to have more than 3,000 multinational clients including brand leaders and Fortune 500 companies. The Amstelveen, Netherlands-based company currently counts Dell, BCD Travel, Michelin among its customers.
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