Filed raises $17M to automate the drudgery of tax prep

Summary

There is a new accounting software in town, coming in with a fresh $17.2 million raise and a desire to shake things up. The company, Filed, hopes to automate the grunt work. “The tax industry is facing a genuine crisis,” Leroy Kerry, Filed’s co-founder CEO, told TechCrunch. Many CPAs are approaching retirement while a dwindling number of students are entering the field, he said, citing much-quoted research from a 2021 report on the topic from the Association of International Certified Professional Accountants. “Firms simply don’t have enough people to process returns efficiently. Meanwhile, professionals are drowning in paperwork, spending nearly half their time on low-value tasks that could be automated,” he says. So he teamed up with Atul Ramachandran, now the company’s CTO, to launch Filed, which uses AI to complete the lifecycle of a tax return. “It reads documents, uses reasoning to apply each firm’s specific approach to tax strategy, and then enters that data into their existing software systems,” Kerry said. He said that when the AI notices a scenario that requires human input, it flags it for review, “keeping humans in control while eliminating the tedious work.” There are others in this space, including tax preparation and accounting assistant software, Black Ore and Basis, respectively. Kerry says his product is different from others because the AI was created specifically for tax workflow, and it directly plugs into software systems rather than forcing clients to overhaul existing tech. The venture firm Northzone led Filed’s $17.2 million round, with Day One Ventures and Neo also participating in the round. It seems life has come full circle for Kerry, who didn’t often see people like him running tech companies. He grew up in South London, raised by a single mom in low-income housing. “Being a CEO wasn’t something I saw possible,” he said. Still, he knew he wanted to become a businessman, “whatever that meant at the time.” He started working at a call cen...