As more software companies launch globally from day one, they’re quickly confronted by a nasty surprise: international tax compliance is one of the hardest parts of scaling a business across borders.
Whether it’s VAT in Europe, GST in Australia, or e-invoicing in Brazil, companies are on the hook for calculating, collecting, and remitting taxes in every market they serve. The rules are opaque. The penalties are steep. And the legacy solutions, which were built for offline commerce and gated by armies of humans, aren’t keeping up.
Sphere fixes this.
Sphere is the AI-native cross-border compliance engine. It handles the entire indirect tax lifecycle of registration, calculation, filing, and remittance in over 100 regions globally. It plugs directly into the systems of record that software companies use (Stripe, Rillet, Tabs, QuickBooks, Chargebee, Orb, Netsuite, etc.), and delivers a true one-stop-shop experience with no handoffs to third party consulting firms.
Sphere’s customers can stay compliant from their first international transaction onward. What powers all of this is Sphere’s proprietary AI-native tax engine, TRAM, short for Tax Rules Automation & Mapping.
TRAM is a breakthrough in compliance infrastructure: it automatically ingests, indexes and monitors tax law globally and classifies products and services across thousands of categories, with universal coverage from day one. This enables Sphere to build new taxonomies in days (vs. months for legacy players) and automatically detect law changes, pushing updates to customers in real time.
Legacy players rely on huge teams of researchers to keep up with global rules. Sphere taught a machine to do it instead, which unlocks speed, accuracy, and surface area that simply didn’t exist before. Importantly, TRAM goes beyond VAT, GST, and sales tax. It will enable Sphere to expand into input tax, withholding tax, e-invoicing, and customs compliance – everything a business needs when selling globally
Three forces make this the right time for Sphere:
- Global-first GTM is the new default: it shouldn’t be a surprise that many of Sphere’s earliest customers are software companies like ElevenLabs, Lovable, Replit, Runway, Windsurf, and many more, which do business worldwide.
- Tax complexity is growing: domestic businesses have to navigate country, state, and local taxes, and international businesses have to navigate cross-border tax regimes that are ever changing.
- Foundation models now enable compliance-level automation: LLMs are now performant enough to be used in high-stakes legal verticals, due to their ability to understand complex and unstructured documents.
And Sphere is showing it works: they are growing rapidly and migrating customers off of legacy systems on average twice per week.
Sphere’s CEO Nick Rudder is a repeat founder who experienced this problem firsthand in his previous YC-backed startup. After receiving tax notices from multiple countries, he pivoted to build the product he wished existed: a programmable, global tax engine for software companies. Alongside a team of elite engineers and tax experts, Nick has scaled Sphere with exceptional efficiency. Their speed, ambition, relentless drive, and customer love remind us of the best fintech and infrastructure companies we’ve partnered with at a16z.
We’re proud to lead Sphere’s Series A and I’m incredibly excited to join their board.
If you’re a global company tired of duct-taping together tax solutions and advisors or an engineer eager to build foundational tax and payments infrastructure, we’d love to hear from you.
