Avalara, Inc. (NYSE:AVLR) was founded in 1995 and is headquartered in Seattle, Washington, USA, with 1592 full-time employees. It is a cloud-based tax compliance software and solution provider.
Avalara, Inc. (AVLR):
The rise of digital commerce and international trade, coupled with the ever-changing global tax and reporting obligations pieced together by local, regional, state, and national tax authorities, has created extremely complex and heavy compliance burdens for companies of all sizes. Avalara’s mission is to provide solutions to this challenge, allowing the company to focus on its core business.
Avalara, Inc. provides a leading cloud-based solution suite designed to automatically identify applicable tax rates, determine applicable tax rates, determine and collect taxes, prepare and file returns, send taxes, maintain tax records, and manage compliance Documents and other processes to improve accuracy and efficiency. In 2017, Avalara, Inc. processed an average of more than 16 million tax decisions per day. The company’s vision is to be a part of every transaction in the world.
Thousands of local, regional, state, and national tax authorities in the United States collect various transaction taxes internationally, and businesses operating in these jurisdictions collect them from customers. Companies must comply with these transaction tax obligations, which need to determine, collect and remit taxes, and keep registration records, taxes, tax exemption certificates and other compliance documents. Transaction tax rules and regulations are constantly changing and are neither intuitive nor inconsistent. There are more than 12,000 across tax jurisdictions in the United States alone, creating complex compliance challenges. Determining the tax payable for a particular sale depends not only on the exact geographic location of the transaction in the relevant tax jurisdiction and the classification of the product or service in thousands of categories, but also on temporary products such as the tax rate, time period, and transaction threshold of a particular product. Preferential tax policies have changed. As tax authorities revise their tax rates and tax rules, modify their jurisdiction and implement other regulatory changes, the thousands of rule changes promulgated every year will cause more complications.
In addition to being complex, transaction tax decisions must usually be executed in real time during the transaction and communicated to various invoice generation systems. For companies that need to levy taxes on numerous products or services in multiple jurisdictions, the rise of e-commerce, globalization, and omni-channel retail is becoming more common, and compliance is even heavier for companies.
Currently, many companies are trying to manually handle the transaction tax compliance process, usually by using static tax forms in electronic spreadsheet software and relying on internal personnel to track related transaction tax requirements and changes. Companies that rely on manual processes for transaction tax compliance may lead to incorrect estimates and incorrect receipts and payments, which may lead to customer dissatisfaction and financial penalties. Many companies use business applications such as accounting, enterprise resource planning (ERP), e-commerce, point of sale (POS), recurring billing, and customer relationship management (CRM) systems to conduct transactions. Although these systems may include basic tax calculation functions, they are not powerful enough or suitable for providing accurate tax compliance assessments for all companies.
Avalara Compliance Cloud combines an advanced database of extensive, in-depth and up-to-date tax content with technology to perform compliance processes, including tax determination, tax document management, and return preparation and filing. Avalara’s platform supports a series of solutions to help companies solve the complexity of transaction tax compliance, process transactions in real time, generate detailed records of transaction tax determination, and reduce errors, audit risks and total transaction tax compliance costs. Companies using the Avalara solution can allocate fewer staff to manage transaction tax compliance and focus on core business operations.
Avalara Compliance Cloud is designed to seamlessly integrate with customers’ business applications and is easy to manage and maintain. Since transactions are executed in the customer’s business application, Avalara Compliance Cloud performs a series of operations to provide tax compliance functions in real time. Avalara achieves this through its more than 600 pre-built integrations that are designed to link Avalara Compliance Cloud with business applications for accounting, ERP, e-commerce, POS, recurring billing, and CRM systems. These integrations usually require little configuration or operation by customers. Avalara’s cloud architecture ensures that its tax content updates can be applied to customers’ transactions immediately and automatically.
Due to the competitive advantage of Avalara, Inc., the company’s platform has been deeply embedded in customers’ business processes and systems, providing customers with an automated solution to enable them to process transactions. Avalara’s strategic position has driven long-term customer relationships, as evidenced by the company’s net revenue retention rate, which has an average revenue retention rate of 107% for the four quarters ended March 31, 2018.
From small businesses to Fortune 100 companies, all industries and businesses of all sizes are using Avalara’s solutions. Mid-market customers with 20 to 500 employees have always been the company’s main target market. As of December 31, 2016, 2017 and March 31, 2018, Avalara’s diversified customer base had 6,250, 7,490 and 7,760 core customers, respectively.
In 2017, Avalara’s core customers accounted for more than 85% of the company’s total revenue. As products on the company’s platform expand, Avalara’s scalable customer base is also increasing. The number of core customers of the company is less than half of the total number of customers, excluding a large number of customers of various sizes who do not meet the income threshold. Many of these customers are in the small business and self-service market, which represents Avalara’s strategic value and growth opportunities. Although most of Avalara’s revenue is currently generated by customers located in the United States, the company also supports transaction tax compliance in Europe, South America and Asia, and is expanding the company’s international business.
Avalara, Inc. (AVLR) investment:
Avalara, Inc. (NYSE:AVLR) submitted its IPO prospectus on 5/11/2018 and listed on the New York Stock Exchange on June 15, 2018. The planned issuance price is US$19.00-21.00, the actual issuance price is US$24, and the issue is 7.5 million. Stocks, fundraising does not exceed 180 million US dollars.