ClearTax, a startup that wants to make filing taxes online in India easier, has added $2 million to its total funding just one month after announcing its angel round.
Its new investors are FF Angel, the seed-stage fund run by Founders Fund, and Sequoia Capital. Each firm contributed $1 million. ClearTax has now raised a total of $3.3 million. Its founder and CEO, Archit Gupta, tells TechCrunch its newest round counts as ClearTax’s seed funding.
This is the first time Founders Fund, which was launched by Peter Thiel in 2005, has invested in an Indian startup. While ClearTax’s angel round was oversubscribed, the company continued talking to venture capital firms and was eager to add Founders Fund and Sequoia to its list of backers, says Gupta.
ClearTax will use its new capital to fill key positions (it recently hired away three top engineers from Flipkart, one of India’s biggest e-commerce firms) and set more ambitious growth targets. The company wants seven million Indian taxpayers on its tax return platform by the end of 2017, up from the three million it expects to have at the end of this year.
It also wants to get over a million users on a new tax-savings platform that will launch in July and is designed to help people figure out what deductions they are eligible for and how they can use the money in tax-exempt investment vehicles instead. The platform is targeted at younger taxpayers, since ClearTax’s aggregate user data shows that “millennials do much worse at tax savings than older users because of lack of clarity about what to do,” says Gupta.
The tax-savings platform will make revenue by charging users a fee and taking a cut on referrals to some financial products. Gupta says it will maintain transparency by disclosing how much commission it makes.