Crypto Tax Platform ZenLedger Raises $15 Million
For years, the tax situation regarding cryptocurrencies has been a bit of a hot topic. In particular, despite not always providing the best guidance, the IRS has repeatedly upped its enforcement of crypto tax rules — even moving a question about crypto to a very prominent spot on the agency’s Form 1040. Now, a startup that specializes in crypto taxes has revealed a new round of funding that will help it to expand its services.
This week, ZenLedger announced that it had closed a $15 million funding round. The Series B was led by ParaFi Capital, while Bloccelerate VC, King River Capital, G1 Ventures, Main Street Investment, Three Point Capital, Shorooq Partners, VaynerFund, Blizzard the Avalanche Fund, and AngelList Quant Fund also participated. To date, the company has now raised a total of $25.9 million, including a $6 million Series A (led by Bloccelerate VC) last August.
ZenLedger is a platform that helps users navigate the intricacies of crypto taxes. By linking their wallets and/or exchanges to the service, customers can view their transactions, download tax forms, connect to TurboTax, and more. Additionally, users can choose to turn their taxes over to a specialist for further help. With the newly-acquired funds, the company plans on expanding its product line-up for professionals including Registered Investment Advisors (RIAs) and Certified Public Accountants (CPAs) so that they can better assist their clients with crypto needs.
In a press release announcing the latest funding round, ZenLedger CEO Pat Larsen said, “We had our best tax season ever so far. Record numbers of investors and capital are flowing into crypto, NFTs, defi- and we are happy to help all those people and their tax professionals with crypto accounting and taxes.” Larsen continued, “We are thrilled about the fantastic investors in this round, and I’m excited to work with them and their amazing portfolio companies.”
Elsewhere, speaking to his firm’s investment in ZenLedger, ParaFi Capital’s Ryan Navi said, “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. We believe ZenLedger offers one the most comprehensive crypto tax solutions in the market today and will help meet that growing demand. We’re proud to become a strategic partner that can help ZenLedger expand further to become one of the leading end-to-end crypto tax tools in the industry.”
It’s worth noting that a key reason why the IRS has taken a special interest in crypto in recent years is because of the high-profile gains assets were generating. In turn, with cryptocurrencies currently experiencing some major headwinds, it will be interesting to see if compliance actually increases when it’s to the potential advantage of taxpayers. Regardless, there’s no doubt that the need for crypto tax services will continue to be strong in the years ahead, making it easy to see why investors would take an interest in ZenLedger. With these new funds, some well-placed partnerships, and a plan to expand its reach, the startup definitely seems to be on a strong upward path.