Column Tax announces $5.1M seed round to launch mobile tax-prep products
Mobile income tax software Column Tax announced today that it raised $5.1 million in seed funding and is launching its first commercial product, which will provide users with early access to their tax refunds. Bain Capital Ventures led the seed round alongside South Park Commons, Core Innovation Capital, and Operator Partners. Some prominent angel investors […]
Mobile income tax software Column Tax announced today that it raised $5.1 million in seed funding and is launching its first commercial product, which will provide users with early access to their tax refunds.
Bain Capital Ventures led the seed round alongside South Park Commons, Core Innovation Capital, and Operator Partners. Some prominent angel investors also participated in the round, including Opendoor founder Eric Wu and former Wealthfront CEO Adam Nash.
Column Tax’s “Tax Refund Unlock” becomes available today to 2 million users of cash advance app Klover, who tend to be millennial and Gen Z Americans, Klover CEO Brian Mandelbaum told TechCrunch in an email. Advance access to tax refunds serves as an interest-free loan, reducing the need for users to take out expensive loans or accrue credit card debt, Mandelbaum said.
The product runs on an API from payroll provider Atomic, allowing users to receive their tax refund earnings in their paychecks.
Column Tax’s tax prep product, “Tax Filing,” will also launch in February 2022 in time for the upcoming tax season, the company told TechCrunch. The seed round proceeds will help the company’s 8-person team grow to over 20 employees by the end of next year with the goal of expanding both products, CEO and founder Gavin Nachbar told TechCrunch in an interview.
Column Tax’s software differs from that of incumbents like TurboTax and H&R Block in that it is mobile-only and will be embedded into a customer’s existing bank account, allowing for year-round integration that the company says will cut down users’ time spent on tax prep.
“Wealthy Americans have access to CPAs and accountants and tax advice people watching over their finances year-round. We think we can take a lot of that, embed into software and give people access to that year-round,” Nachbar said.
Nachbar, who previously served as head of operations strategy and infrastructure at Waymo, said that payroll data companies have created “a whole new wave of opportunity” for fintechs looking to build tech solutions around income and payroll.
“Before Atomic, it wouldn’t be possible to understand someone’s tax position mid-year without them downloading a pay stub and sending it to you via email,” Nachbar said.
While Column Tax only supports federal income tax filings today, it plans to eventually add state tax offerings, starting with New York and California, Nachbar added.
Nachbar sees growth potential for embedded tax solutions that are integrated with other financial platforms, pointing to Cash App’s takeover of Credit Karma Tax as one notable example.
“We’re entering this new era of embedded taxes,” Nachbar said. “The income tax engine is really complex. It’s a large technical problem. We’re building a large engineering team to tackle that.”