The San Francisco and Dublin based payments infrastructure company Stripe recently announced its acquisition of sales tax compliance platform TaxJar. Stripe, a leading provider of e-commerce payment solutions such as Stripe Connect, Stripe Payments, and Stripe Billing, is looking to expand its suite of tax tools for commerce platforms that currently run on Stripe.
The acquisition of TaxJar marks the third acquisition for Stripe in the past two years, with its acquisition of the Irish payments start-up Touchtech in April of 2019, followed by the acquisition of Nigeria’s Paystack in October of 2020. All three of these acquisitions are helping Stripe to grow its market presence internationally, as well as expand its product offerings beyond e-commerce payments.
It looks like Stripe has no intention of slowing down its reach as it looks to invest more capital in 31 of the 42 European countries it currently operates in. They’ll be able to do this after closing their most recent round of funding, where they raised an additional $600 million, bringing their new valuation to $95 billion.
US online sales jumped 44% in 2020
As online shopping continues to grow, especially as spending habits were forced to change due to the coronavirus pandemic, e-commerce companies will face greater challenges when it comes to accurately tracking, calculating, reporting, and filing taxes. According to digitalcommerce360.com, online shoppers spent $861.12 billion in 2020 with US retailers alone. This is an increase of 44% or $263.1 billion from the prior year, and online spending represented 21.3% of total retail sales last year, compared with 15.8% from 2019.
Source: digitalcommerce360.com
The acquisition of TaxJar will offer new sales compliance automation features to companies that are running on Stripe to assist in handling this dramatic increase in online transactions. The most important and significant features are below:
With this acquisition, all 200 employees of TaxJar will join Stripe and existing TaxJar customers won’t see any immediate changes. Their products will continue to run and be available as normal.
TaxJar’s CEO, Mark Faggiano, is optimistic about this merger, stating:
“We think about how we can help startups and multinational companies alike remove barriers to grow their business. And what that means is making the complicated work of sales tax compliance as straightforward as possible.”
It’s both companies’ goal to integrate better and newer sales tax tools into the Stripe platform using TaxJar technology as the foundation. The financial terms of this deal have yet to be disclosed.
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