Avalara is currently owned by Vista Equity Partners, a leading global investment firm focused on enterprise software, data, and technology-enabled businesses. This acquisition transitioned Avalara from a publicly traded company to a privately held entity.
Understanding Avalara's Current Ownership
In October 2022, Vista Equity Partners successfully completed its acquisition of Avalara in an all-cash transaction valued at approximately \$8.4 billion. This strategic move brought Avalara under private ownership, allowing the company to focus on long-term growth and innovation in the compliance automation sector with the backing of a specialized private equity firm.
The Genesis and Growth of Avalara
Avalara's journey began in 2004 when it was co-founded by Scott McFarlane. Initially, the company specialized in providing digital sales tax compliance solutions primarily for businesses in the U.S. Over the years, Avalara has experienced significant growth, expanding its services globally and evolving into a market leader in comprehensive compliance automation software. Its core mission has remained consistent: helping businesses of all sizes manage their tax obligations accurately and efficiently.
What Does Avalara Do?
Avalara provides cloud-based software solutions that automate various transaction tax processes, including:
- Sales and Use Tax: Calculating, filing, and remitting sales tax in multiple jurisdictions.
- VAT and GST: Managing value-added tax and goods and services tax for international operations.
- Excise Tax: Handling complex excise tax requirements.
- Customs and Duty: Streamlining import/export duties and compliance.
- Tax Exemption Certificate Management: Digitizing and managing tax-exempt sales.
By integrating with various business applications like ERP, e-commerce, and accounting systems, Avalara's platform helps companies reduce audit risk, improve accuracy, and free up valuable resources that would otherwise be spent on manual tax compliance tasks.
Key Milestones in Avalara's Journey
Avalara's path to becoming a leader in compliance automation includes several significant milestones:
| Year | Milestone | Description |
|---|---|---|
| 2004 | Founding | Co-founded by Scott McFarlane, focusing on digital sales tax solutions. |
| 2018 | Initial Public Offering (IPO) | Avalara became a publicly traded company on the New York Stock Exchange (NYSE) under the ticker symbol AVLR. |
| 2022 | Acquisition by Vista Equity Partners | Transitioned from a public company to a privately held entity, becoming part of Vista Equity Partners' portfolio. |
The Impact of Private Ownership
Under the ownership of Vista Equity Partners, Avalara gains several advantages, including:
- Long-Term Strategic Focus: Freedom from the quarterly reporting pressures of public markets, allowing for more investment in research, development, and strategic initiatives.
- Operational Enhancement: Access to Vista's expertise in scaling software companies, potentially leading to optimized operations and accelerated product development.
- Market Expansion: Continued global growth and expansion into new compliance areas, leveraging Vista's network and resources.
This ownership structure positions Avalara to continue its innovation and leadership in the rapidly evolving landscape of tax compliance automation.
