Zamp leadership team

Zamp targets growing demand for sales tax solutions

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Zamp leadership team

Image Credits: Zamp

Until six years ago, many e-commerce and SaaS businesses could have avoided paying sales tax to states where they had customers, but no physical presence. But as online shopping grew, states realized they were losing out on tax revenue.

The era of free-riding for online retailers ended in 2018 when South Dakota took Wayfair to court over sales tax collection. The Supreme Court ultimately sided with South Dakota. 

Now, online stores and SaaS companies have to collect sales tax from their customers wherever it’s required, which is not an easy task given that tax laws vary significantly by city, county and state.

Rohit Bhadange, who worked in venture capital and private equity, identified sales tax compliance as a major pain point for e-commerce and SaaS businesses. So, about 18 months ago, he launched Zamp, a startup whose software can automatically calculate and file sales taxes for businesses of all sizes.

Since then, Zamp has grown its customer base to over 400 companies and achieved annual recurring revenue in the mid-millions, according to Bhadange. The fast growth captivated investors.

On Thursday, Zamp announced a $10 million Series A led by Valor Equity Partners with participation from Venus Williams, Day One Ventures and other investors.

In addition to expanding its e-commerce and SaaS client base, Zamp has begun to partner with accounting firms grappling with a talent shortage caused by declining interest in the profession. The company’s accounting firm clients include top 25 U.S. accounting firms Baker Tilly and Withum.

Accounting firms are under increased pressure to assist clients with sales tax compliance, particularly as states intensify their tax audits, Bhadange said. “You have this perfect storm where enforcement is increasing; tax compliance is increasing, [but the number of] accountants is decreasing.”

To meet that demand, Zamp is introducing a new product called Z-tax, which helps accountants and bookkeepers provide sales tax services without increasing their headcount.

“We want them to focus on higher value advisory services while we manage the entire sales tax process on the back end,” Bhadange said.

Zamp is not alone in the market for sales tax compliance solutions for startups, particularly SaaS businesses. Its primary competitor is Anrok, backed by Khosla Ventures and Sequoia. Anrok, founded four years ago, may be slightly older and larger — having recently raised a $30 million Series B — but Zamp’s rapid growth indicates there is room for multiple players in this space.

1991 Ventures founders, Viktor and Denis Gursky

1991 Ventures in London joins the growing list of VCs aimed at Ukrainian startups

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1991 Ventures founders, Viktor and Denis Gursky

Image Credits: 1991 Ventures / 1991 Ventures founders, Viktor and Denis Gursky

U.K.-based limited partners Venrex and Samos Investments are this week backing the launch of a new VC primarily aimed at investing in startups led by Ukrainians inside and outside the war-torn country. The LPs are better known for being early institutional investors in the successful early stage startup funds Seedcamp and Entrepreneur First.

1991 Ventures is the brainchild of Ukrainian brothers Denis and Viktor Gursky, who are better known for running incubation and accelerator programs inside Ukraine.

The U.K.-based VC is launching with a £15 million ($18.8 million) fund to invest in both Ukrainian and Central Eastern European (CEE) startup talent.

Although some might say investing in Ukrainian startups is crazy when the country is in the battle of its life against a brutal invasion by Russia, as we covered recently, two years after the invasion, Ukrainian-born startups are still faring well.

The Gursky brothers previously backed more than 200 startups between 2016 and 2024, via their incubator Social Boost and their 1991 Accelerator.

Many of those were out of their hometown of Mariupol, made famous after its heroic battle against Russia and from where its team managed to relocate to safety. Startups backed to date include legal tech startup AXDRAFT, European toll payment app eTolls and cybersecurity company Osavul.

Over an interview Denis Gursky, founding partner of 1991 Ventures, told me: “There is a wealth of untapped talent in Ukraine and Central and Eastern Europe… My brother, Viktor, and I want to create a pipeline of high-quality dealflow to that.”

He said the LP backers of the fund, “are very interested to tap into Eastern European and Ukrainian specifically.”

Gursky also said: “It’s very hard for Ukrainian founders to tap into London. So we would like to provide them with pre-seed or seed funding so that they can… access larger rounds in the future and understand how the U.K. can be a springboard to global funding.”

But 1991 Venture won’t be the only Ukrainian-born fund vying for the attention of their brethren founders.

There is also Ukrainian VC fund Roosh Ventures, which has previously backed Reface AI, a face swap app with 250 million-plus downloads, and Deel, a payroll solution that enables companies to pay people in 150+ countries.

Additionally, SID Venture Partners was launched by the co-founders of outsourcing companies Sigma Software and IdeaSoft and the Datrics product.

SMRK — launched in 2013 by Oleksandr Kosovan, founder of MacPaw, and Andrii Dovzhenko — has invested in Osavul, Deus Robotics, Aspichi and Prengi.

Then there is Flyer One Ventures, which has backed Vochi, Allset and PromoRepublic, among others.

Finally, TA Ventures is perhaps the best known and most active Ukrainian VC internationally, headed up by the almost-ubiquitous Viktoriya Tigipko.

It has invested in more than 200 startups, including 15 Ukrainian ones, and made 42 exits, according to Crunchbase.

Many of the tech companies Ukraine will produce in the forthcoming years are likely to be either “dual-use” or related to defense. For instance, almost 200 companies produced drones in Ukraine last year, up from seven in 2022.

Maniv VC firm

VC firm Maniv is growing in every direction, armed with a $140M new fund

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Maniv VC firm

Image Credits: Maniv

Venture firm Maniv has grown by nearly every measure since it launched eight years ago in Israel — from its investor base and 40-startup portfolio to its geographic focus, footprint and fund size.

But even with a freshly closed $140 million fund in its coffers and a new office in New York City, founder Michael Granoff says Maniv is still just a seed-stage fund at heart “that occasionally breaks its own rules.”

What that means is largely the same as when it launched in 2016: an early-stage investment strategy focused on what the firm describes as the intersection between mobility, transportation and energy.

There are, however, some notable evolutions that hint at Maniv’s investment strategy with its third and latest fund known as Maniv III, TechCrunch has exclusively learned. Maniv, once firmly focused on Israeli startups, continues to expand its geographic focus and now has active portfolio companies in nine countries.

“So we will certainly keep our eyes on the local market here but we’ll go for the best deals and learn everything we can from the deal flow that comes in a very distributed way from around the world,” Granoff said.

The VC firm has also largely stopped using the once trendy umbrella term “mobility,” (often leaving it out of its original name Maniv Mobility) and has opted instead to talk about deep tech, decarbonization and digitization of the transportation sector.

“I thought the trajectory of that term (mobility) was going to continue to clarify overtime, but in fact, I think the opposite has happened for a bunch of reasons,” Granoff explained, adding that while the term mobility might not be used as often, it is still very much central to its mission.

Nate Jaret, general partner at Maniv, said the $140 million fund does reflect new goals: a more diverse group of investors as well as the inclusion of financial investors who see the decarbonization and digitization of all forms of transportation (even the air and sea) as an irreversible secular trend that generates the best financial returns.

Historically, Maniv’s investor base has been loaded with automakers. It now better reflects the critical and myriad tributaries in transportation and mobility, Jaret says. In other words, Maniv went outside traditional automotive to find strategic investors in leasing, fintech, logistics, vehicle maintenance, energy, fleet management and repair.

Its newest investors in the fund, a group that includes BNP Paribas Personal Finance and the venture arms of Shell and Enterprise Mobility, represent “the rich tapestry of industries that are directly impacted by the changes in transportation across these themes of decarbonization and digitization,” Jaret said. “It’s not just carmakers and Tier 1s that make the platforms but also aftermarket insurance, maintenance repair, infrastructure players and energy players that are trying to understand their new position.”

The Maniv III fund also includes return investors Valeo and Jaguar Land Rover venture arm InMotion Ventures. Toyota Motor Corp.’s Woven Capital, vehicle leasing company Arval, transportation infrastructure giant Ferrovial, the industrial manufacturing firm ITT Inc., fleet payments business WEX and an unnamed European insurance company also participated in the fund.

Maniv’s fund also reflects an evolving investment strategy.

The firm, which has nearly $320 million in assets under management, previously led investments in AI edge computation chip startup Hailo in Tel Aviv; EV ridehail and charging network Revel in New York City; medium-duty EV truck maker Harbinger Motors in California; intercity busing platform Kolors in Mexico City; two-wheeler EV startup River from India; and Spanish car subscription Bipi, which was acquired by Renault’s financing arm RCI Banque in 2021.

Maniv is now creeping into the broader climate tech world — at least where it overlaps with transportation. The firm has used the new fund to make four investments to date, including in a Chicago-based startup called Celadyne, which is working to extend the lifespan and efficiency of proton-exchange membranes to make green hydrogen production financially viable.

The fund has also invested in Israeli startup Neologic, which has developed a proprietary chip design for performance and power gains in data centers and automotive; an e-motorcycle battery-swapping startup called Vammo that’s based in Brazil; and San Francisco-based Circular, which is pushing the use of post-consumer recycled plastic in manufacturing by closing pervasive information and testing gaps.

With global ambitions, VC firm Maniv Mobility raises $100 million from automakers, suppliers

Man standing in front of big blue screen with charts and data spread out before him.

Investors are growing increasingly weary of AI

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Man standing in front of big blue screen with charts and data spread out before him.

Image Credits: Weiquan Lin / Getty Images

After years of easy money, the AI industry is facing a reckoning.

A new report from Stanford’s Institute for Human-Centered Artificial Intelligence (HAI), which studies AI trends, found that global investment in AI fell for the second year in a row in 2023.

Both private investment — that is, investments in startups from VCs — and corporate investment — mergers and acquisitions — in the AI industry were on the downswing in 2023 versus the year prior, according to the report, which cites data from market intelligence firm Quid.

AI-related mergers and acquisitions fell from $117.16 billion in 2022 to $80.61 billion in 2023, down 31.2%; private investment dipped from $103.4 billion to $95.99 billion. Factoring in minority stake deals and public offerings, total investment in AI dropped to $189.2 billion last year, a 20% decline compared to 2022.

Yet some AI ventures continue to attract substantial tranches, like Anthropic’s recent multibillion-dollar investment from Amazon and Microsoft’s $650 million acquisition of Inflection AI’s top talent (if not the company itself). And more AI companies are receiving investments than ever before, with 1,812 AI startups announcing funding in 2023, up 40.6% versus 2022, according to the Stanford HAI report.

So what’s going on?

Gartner analyst John-David Lovelock says that he sees AI investing “spreading out” as the largest players — Anthropic, OpenAI and so on — stake out their ground.

“The count of billion-dollar investments has slowed and is all but over,” Lovelock told TechCrunch. “Large AI models require massive investments. The market is now more influenced by the tech companies that’ll utilize existing AI products, services and offerings to build new offerings.”

Umesh Padval, managing director at Thomvest Ventures, attributes the shrinking overall investment in AI to slower-than-expected growth. The initial wave of enthusiasm has given way to the reality, he says: that AI is beset with challenges — some technical, some go-to-market — that’ll take years to address and fully overcome.

“The deceleration in AI investing reflects the recognition that we’re still navigating the early phases of the AI evolution and its practical implementation across industries,” Padval said. “While the long-term market potential remains immense, the initial exuberance has been tempered by the complexities and challenges of scaling AI technologies in real-world applications … This suggests a more mature and discerning investment landscape.”

Other factors could be afoot.

Greylock partner Seth Rosenberg contends that there’s simply less appetite to fund “a bunch of new players” in the AI space.

“We saw a lot of investment in foundation models during the early part of this cycle, which are very capital intensive,” he said. “Capital required for AI applications and agents is lower than other parts of the stack, which may be why funding on an absolute dollar basis is down.”

Aaron Fleishman, a partner at Tola Capital, says that investors might be coming to the realization that they’ve been too reliant on “projected exponential growth” to justify AI startups’ sky-high valuations. To give one example, AI company Stability AI, which was valued at over $1 billion in late 2022, reportedly brought in just $11 million in revenue in 2023 while spending $153 million on operating expenses.

“The performance trajectories of companies like Stability AI might hint at challenges looming ahead,” Fleishman said. “There’s been a more deliberate approach by investors in evaluating AI investments compared to a year ago. The rapid rise and fall of certain marquee name startups in AI over the past year has illustrated the need for investors to refine and sharpen their view and understanding of the AI value chain and defensibility within the stack.”

“Deliberate” seems to be the name of the game now, indeed.

According to a PitchBook report compiled for TechCrunch, VCs invested $25.87 billion globally in AI startups in Q1 2024, up from $21.69 billion in Q1 2023. But the Q1 2024 investments spanned across only 1,545 deals compared to 1,909 in Q1 2023. Mergers and acquisitions, meanwhile, slowed from 195 in Q1 2023 to 176 in Q1 2024.

Despite the general malaise within AI investor circles, generative AI — AI that creates new content, such as text, images, music and videos — remains a bright spot.

Funding for generative AI startups reached $25.2 billion in 2023, per the Stanford HAI report, nearly ninefold the investment in 2022 and about 30 times the amount from 2019. And generative AI accounted for over a quarter of all AI-related investments in 2023.

Samir Kumar, co-founder of Touring Capital, doesn’t think that the boom times will last, however. “We’ll soon be evaluating whether generative AI delivers the promised efficiency gains at scale and drives top-line growth through AI-integrated products and services,” Kumar said. “If these anticipated milestones aren’t met and we remain primarily in an experimental phase, revenues from ‘experimental run rates’ might not transition into sustainable annual recurring revenue.”

To Kumar’s point, several high-profile VCs, including Meritech Capital — whose bets include Facebook and Salesforce — TCV, General Atlantic and Blackstone, have steered clear of generative AI so far. And generative AI’s largest customers, corporations, seem increasingly skeptical of the tech’s promises,  and whether it can deliver on them.

In a pair of recent surveys from Boston Consulting Group, about half of the respondents — all C-suite executives — said that they don’t expect generative AI to bring about substantial productivity gains and that they’re worried about the potential for mistakes and data compromises arising from generative AI-powered tools.

But whether skepticism and the financial downtrends that can stem from it are a bad thing depends on your point of view.

For Padval’s part, he sees the AI industry undergoing a “necessary” correction to “bubble-like investment fervor.” And, in his belief, there’s light at the end of the tunnel.

“We’re moving to a more sustainable and normalized pace in 2024,” he said. “We anticipate this stable investment rhythm to persist throughout the remainder of this year … While there may be periodic adjustments in investment pace, the overall trajectory for AI investment remains robust and poised for sustained growth.”

We shall see.