Blockpit — $10m for crypto tax and compliance
We’re excited about Fabric Ventures’ new investment in Blockpit GmbH, the crypto tax and compliance specialist.
In many ways this company signals the coming of age of the crypto markets. Although digital assets are in the early innings of adoption, with total crypto users still only representing ~ 1% of the global population, there is no doubt that large FIs & fintechs, such as GP Anil Hansjee’s prior employer PayPal, are making it easier to access these markets for the broader user base, and we all know what the only other certainty in life is, other than death. Indeed, Blockpit with its strong relationships and partnerships with top 4 audit firms and regulators, stands on the crest of some substantial and unstoppable regulatory waves of change which are already making daily news stories, as highlighted by Biden’s recent controversial infrastructure bill. The DAC8 proposal gives authorities a massive edge in enforcing regulation and punishing tax fraud.
Going forward the team are laser focused on forging more and more partnerships which will drive their mindshare: Their KPMG Tax & Legal/big 4 firm compliance is driving sales from a “kingmaking” effect, seen in other crypto sectors. Their virtuous cycle encompasses the authorities (who issue standards/guidelines for taxation and compliance) to enterprises (who offer their services following these standards) to consumers who need help, simplicity and automation. The opportunity this enables, is to monetise multiple sides of a transaction — the consumer, the business and regulators/government.
All of these tailwinds and opportunities would be a bagatelle for a venture investment opportunity if it were not for the collective strength of the team who have already evidenced a strong ability to execute and indeed on very little external capital to date. This includes successfully executing on M&A and post M&A integration to create a company and product set with a broader reach and scale.
Tax remains one of the most complex issues in crypto, we at Fabric Ventures know personally having handled digital assets since 2012. Not only are the tax standards evolving and different across jurisdictions, the technical challenge exists in deciphering smart contracts to translate DeFi transactions into readable tax events. Blockpit has a unique combination of Tax, Know Your Transaction and DeFi.
We are glad to have the Blockpit GmbH team on speed dial!
