Zenwork, a Hyderabad-based software-as-a-service (SaaS) platform for businesses' digital tax compliance and regulatory reporting, has raised Rs 1,200 crore in funding from Spectrum Equity, a US-based growth equity firm, as it seeks to expand its operations beyond the United States and into Europe and Asia.
Sanjeev and Rekha Singh founded the almost 10-year-old business, which has been operating on its own until recently, but said it needed funding to take advantage of the large increase in the automated tax compliance and regulatory reporting industry as a result of the Covid-19 epidemic.
“Ten years ago we started in the US because the India market for SaaS wasn’t that mature and we were a bootstrapped company. With this funding we are aggressively going to expand into Europe, India and APAC,” said Sanjeev Singh, co-founder and CEO at Zenwork. “We wanted not just the money but a good growth partner, where Spectrum Equity has come in.”
Zenwork claims to help over 100,000 small businesses, including 30,000 certified public accounting firms (CPAs). In each of the last two years, it claims to have recruited over 40,000 new customers, with over ten unicorns among its current customers.
To help with this, the company announced that it will invest heavily in increasing the capabilities of its Tax1099 and Compliancely platforms, hiring between 100 and 150 engineers, salespeople, and product managers. Up until today, Zenwork has only 18 employees. "Zenwork has achieved remarkable success to date by focusing relentlessly on the digital tax reporting and onboarding requirements of its diverse customer base," said Adam Margolin, Managing Director at Spectrum Equity. "With millions of businesses subject to tax informational reporting and likely to adopt e-filing over the coming years, we see a massive opportunity for Zenwork.”
According to Singh, Zenwork expects to acquire up to 50,000 new customers by 2022, as more businesses turn to gig workers to expand, increasing their need for regulatory and tax compliance services. Zenwork's API-driven architecture, as well as its focus on acquiring high-quality data from federal and other sources, he added, are attracting customers.