Crypto tax startup ZenLedger, used by the IRS, raises $15M

(ZenLedger Image)

ZenLedger, a Seattle-based startup that aims to simplify taxation, accounting and audits for cryptocurrency, raised $15 million.

ZenLedger provides a dashboard that collects and analyzes users’ transaction information across blockchain services, including exchanges, NFTs, financial services, wallets, and tokens. ZenLedger has 47 employees and more than 50,000 users, with new customer growth tripling in the last year. Its customers include the Internal Revenue Service, which renewed its contract in March.

“As the digital asset space matures, we expect the demand for services that help provide regulatory and tax compliance to grow significantly over the coming years,” said Ryan Navi, a principal of ParaFi Capital, in a statement announcing the funding Wednesday. ParaFi Capital led the funding round.

Cryptocurrencies have recently dropped substantially from all-time highs and Bitcoin is down more than 50% since its peak in November. But investors remain bullish. Silicon Valley firm Andreessen Horowitz announced Wednesday a new $4.5 billion fund for backing crypto and blockchain companies.

ZenLedger competitors include Seattle-based startups such as BearTax, which recently raised $3.2 million, and TaxBit, which raised $130 million last year.

ZenLedger CEO Patrick Larsen, who previously worked at Profitics and Amazon, has led the company since co-founding it in 2017 with CTO Brian Starbuck.

ZenLedger brought on several new executives in April: CSO Duyane Norman, CTO Daniel Escobar, CFO Jonté Harrell, and COO Greg Adams.

The New York Times highlighted ZenLedger earlier this year in a piece that analyzed how its former executive Dan Hannum, who was fired in March, fabricated much of his life story.

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Participants in the Series B funding round include Bloccelerate VC, King River Capital, G1 Ventures, Main Street Investment, Three Point Capital, Shorooq Partners, VaynerFund, Blizzard the Avalanche Fund, and AngelList Quant Fund. Billionaire Mark Cuban was the lead investor in the Series A round through his firm Radical Ventures.

The new funding brings the company’s total raised to date to $27 million.

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