— Bellevue, Wash.-based financial services firm Formations raised $8 million. The startup provides services and software to simplify and reduce taxes and other paperwork for self-employed individuals.
The company’s main product is a process to facilitate the formation an “S-Corporation,” a business designation that often yields tax advantages. Owners can flag the money they receive from the business as a salary or dividend, which can decrease self-employment taxes. Formations handles the paperwork.
Formations was founded in 2019 by tax and accounting expert Shahar Plinner and software marketer Uri Bar-Joseph. Plinner, who is CEO, was previously founder and CEO of Bellevue-based tax and accounting firm GPL. Bar-Joseph, who is COO, previously worked in marketing for Amazon’s Alexa and Mindspace, an Israeli global coworking company.
The number of unincorporated self-employed workers rose rapidly during the pandemic, and now totals more than 9 million.
Formations is focusing on realtors to start; more than 156,000 people joined the profession in 2020 and 2021.
Each customer realizes an average of about $8,000 in savings, and the company has served about 700 customers to date, according to a spokesperson.
“Taxes are the largest unmanaged business expense and one of the biggest surprises for taxpayers, especially for the self-employed,” Ryan Kruizenga, general partner at Arthur Ventures, said in a statement. Arthur, based in Minneapolis, led the Series A funding round.
The 57-employee company also announced a new partnership with pay and benefits software company Gusto. The partnership builds on existing one with Xero, which provides accounting software.
The company previously raised a $3.5 million seed round. Funders of that round included Avalara co-founder Rory Rawlings; Karat executive Erez Yarkoni; Ran Nahmias, Seattle based co-founder of Israeli cybersecurity company Cyberpion; and Webb Stevens, Brian Heather, Amir Netz, Steven Schwartz, and Oudi Antebi. Total funding to date is $11.5 million.
— Recurrent, a platform for helping people make informed choices when buying used electric vehicles, raised $4.5 million. The Seattle-based startup provides independent reports on the condition of car electric batteries.
Recurrent also announced a new client, the Del Grande Dealer Group in the Bay Area. The group will feature Recurrent ratings for its used electric vehicle listings.
CEO Scott Case and CTO Kyle Rippey co-founded Recurrent. Case was previously chief operating officer at EnergySavvy, a company that supports clean energy use. Rippey has worked at startups including Rover.com, Estately and Avvo.
The company has 20 employees and in December 2020 raised a $3.5 million seed round. Recurrent is a spinout of Seattle’s Pioneer Square Labs.
New investors include Automotive Ventures, Goodyear Ventures, Hearst Ventures, Avesta Fund, MAP Investco, Circumference Group, Enertech Capital, and E8 Angels. Existing investors also participated in the latest round, including Vulcan Capital, AAA of Washington, Wireframe Ventures, PSL Ventures, Ascend, Prelude Ventures, and Powerhouse Ventures.