Defmacro Software Pvt Ltd, which runs income tax returns e-filing platform ClearTax, has secured $1.3 million (around Rs 8.6 crore) in angel funding from Silicon Valley investors, including PayPal co-founder Max Levchin.
Other investors include Scott and Cyan Banister, serial investors in Uber, SpaceX, Postmates and Zappos; Neeraj Arora, business head at WhatsApp; Naval Ravikant, founder and CEO of Naval List; Ruchi Sanghvi, vice president at Dropbox; Sumon Sadhu, a Y Combinator alumnus and Ryan Petersen, founder and CEO of shipping startup Flexsport.
ClearTax is Levchin's first India-focused investment.
Clear Tax was among the 47 startups selected for Y Combinator's 2014 summer batch. It was the fourth Indian startup to be funded by Y Combinator.
The funds will be used to improve the firm's product offering, expand the customer base and hire more talent, Archit Gupta, co-founder, ClearTax said.
ClearTax provides e-tax filing services to individual consumers, small and medium sized enterprises (SMEs) as well as chartered accountants (CA). For individual consumers, the firm offers simple tax filing services, while SMEs can avail of its tax and TDS software. The latter helps businesses prepare their quarterly statements for their employees and vendors, and CAs use the software to assist their clients. “More than 5,000 SMEs and more than 10,000 CAs use our software, and over a million consumers use the filings,” claims Gupta.
The firm charges individual consumers between Rs 600 and Rs 13,000. It also offers these plans to employees in organisations, which the HR department runs as a benefits programme. ClearTax also earns from companies by offering them its tax and TDS software, and by assigning them a CA. ClearTax claims to have processed tax return e-filings for 300,000 individuals in 2014-15 and an estimated one million users in 2015-16.
ClearTax's target audience is the millennials, people in the 25-30 years age group, who comprise 60% of the company's consumer base, while senior citizens make up 5%.
Gupta says that the biggest pain point his firm faces is lack of awareness among customers and hopes to plug the gap by further developing the product. The firm is also planning to expand its operations this year.
ClearTax was founded in 2011 by IIT Guwahati alumnus Archit Gupta, chartered accountant Raja Ram Gupta, BITS Pilani computer science graduate Srivatsan Chari and Mumbai University computer science Ankit Solanki, a computer science graduate from University of Mumbai. While Gupta oversees the firm's overall business and product, Chari and Solanki look after operations and technology, respectively.
ClearTax competes with income tax e-filing sites such as TaxSmile, TaxSpanner and HRBlock.