Featured Article

Tactic wants to reinvent accounting software for the web3 age

Founders Fund & Ramp co-led a $2.6M financing for the 8-person startup

Comment

Image Credits: Tactic

Tactic, a startup that helps businesses manage — and simplify — cryptocurrency finances, is emerging from stealth today with $2.6 million in seed funding.

Founders Fund and finance automation startup Ramp co-led the raise for Tactic, an eight-person outfit based in New York City. Elad Gil and Figma co-founder Dylan Field also participated in the funding.

CEO Ann Jaskiw founded Tactic after learning that founders in web3 were handling their accounting in spreadsheets. Existing accounting software providers, she concluded, “were not built to handle crypto transactions.”

The core of Tactic’s product, said Jaskiw, is to help a CFO or head of finance answer the question, “Where did the money go?” at the end of a quarter.

“Right now for most financial professionals, their audit trail of crypto transactions is a debit transaction from Silicon Valley Bank or whichever bank, into a centralized exchange like Coinbase,” Jaskiw explained. “Tokens leave that central place, and it then becomes a big bit of a question mark. What we’re seeing is people are spending a lot of time in manual spreadsheets, trying to track what transactions happen and trying to calculate their gain and loss. It’s just incredibly cumbersome currently.”

Generally, companies interacting with blockchains struggle to make sense of their fragmented activity, according to Jaskiw.

“They tend to manage multiple wallets across various blockchains and hold funds in centralized exchanges or self-custody solutions like Gnosis Safe,” she said.

This is where Tactic comes in.

Tactic says it is tackling the problem of accounting for a business’s cryptocurrency holdings and on-chain activity by aggregating data across disparate sources to give businesses “a full treasury view of their balances and activities.” Its software, Jaskiw said, helps companies automatically categorize transactions and apply accounting logic such as calculating $USD gain/loss and taxable events. Accountants can then reconcile a business’s crypto-subledger to traditional accounting software like QuickBooks.

“It doesn’t matter what they’re building, it can be any on-chain transaction,” Jaskiw said. “But there’s just no cohesive audit trail if you’re a crypto company. So if you have a normal bank account, you have all your clean inflows and outflows, and you may have more than one bank account but it’s usually in a single spot — whereas crypto transactions can span a dozen different wallets or products.”

After talking to hundreds of companies, Tactic found that decentralized finance or “DeFi” transactions were the most problematic. For example, according to Jaskiw, a single interaction with a smart contract can generate hundreds of “nested transactions,” all of which need to be broken out for accounting purposes. 

Tactic, she said, has partnered with accounting firms to help interpret accounting guidelines for DeFi-specific activities such as staking, NFT minting and airdrops.

Since its 2021 launch, Tactic says it has signed up “dozens” of customers, ranging from early-stage startups to billion-dollar enterprises across industries including NFTs, protocols and DeFi. The company is designing its offering to work with businesses that have “hundreds of thousands” in transaction volumes per month.

“This is a pain point for everyone,” Jaskiw told TechCrunch. “The bigger an organization gets, the more complex and worse the problem gets. So that’s where we’re seeing the most excitement about this.”

She also believes that a common misconception about the crypto space is that a lot of people are trying to avoid regulation. Tactic, Jaskiw said, has found the opposite to be true.

“A lot of companies, the private C corps in the U.S. specifically, are really trying to do the right thing, follow the rules and stay compliant,” she said. “They just right now lack some of the tooling and guidance to be able to do that efficiently.”

Image Credits: Tactic

John Dempsey, Tactic’s VP of strategy and ops, says that Tactic makes it “easy” for businesses to transact in cryptocurrency, “knowing they can manage their financial activity in a clean, compliant way.” Dempsey is former VP of product at blockchain forensics firm Chainalysis, a blockchain analysis company that last March closed on a $100 million Series D financing, doubling its valuation to over $2 billion.

But it’s not just web3 companies struggling with the issue.

Crypto is “rapidly penetrating” even non-crypto companies, according to Scott Orn, COO of Kruze Consulting, a CPA firm that serves startups.

“Crypto is quickly becoming part of the financial infrastructure of many startups. We are seeing 5% to 10% of our non-crypto SaaS companies engaging in crypto transactions — those are SaaS companies that have nothing to do with crypto,” Orn told TechCrunch. “Two years ago almost no non-crypto companies were using crypto — that’s pretty amazingly fast growth.”

Meanwhile, he added, crypto introduces a host of accounting issues that should be solved by software, including booking transactions correctly into the general ledger, recording tax planning information and handling smart contract-generated transactions.

Crypto transactions can create taxable events, points out Orn.

For example, a company has a contract to get paid a specific number of crypto tokens, and if those tokens increase in value before the company actually gets paid, that could result in “huge revenue spikes.”

“This could push a startup into profitability, meaning taxes are owed,” Orn added. “And selling crypto assets that have increased in value creates a taxable gain. We’ve seen both of these scenarios, and keeping track of it all manually is difficult in a high-volume situation.”

Founders Fund Principal Leigh Marie Braswell said that Tactic’s product is “already saving crypto accounting teams days each month.”

“We believe Tactic has the potential to become a massive player as more companies move into web3,” she added.

Eric Glyman, Ramp CEO and co-founder, told TechCrunch that his company invested in Tactic based on the belief that there is a need for “simple, intuitive solutions for businesses transacting with crypto.”

“We anticipate that demand will only grow in the future,” he said.

Glyman also saw what he described as “strategic alignment” with Ramp’s long-term vision (Note: The company secured its own funding earlier this year at an $8.1 billion valuation).

“Tactic is built with the intent to save businesses time and it’s unique in that the platform works for companies that have high transaction volumes,” he said. “And everything we do at Ramp is in support of saving businesses time and money.”

Tactic plans to use its new capital to build out its product and team.

“We haven’t had to do any external marketing or running of ads,” Jaskiw said. “We’ve been getting a lot of inbound excitement.”

5 crypto tax tools that could save your ass on Tax Day

More TechCrunch

Welcome back to TechCrunch’s Week in Review. This week had two major events from OpenAI and Google. OpenAI’s spring update event saw the reveal of its new model, GPT-4o, which…

OpenAI and Google lay out their competing AI visions

Expedia says Rathi Murthy and Sreenivas Rachamadugu, respectively its CTO and senior vice president of core services product & engineering, are no longer employed at the travel booking company. In…

Expedia says two execs dismissed after ‘violation of company policy’

When Jeffrey Wang posted to X asking if anyone wanted to go in on an order of fancy-but-affordable office nap pods, he didn’t expect the post to go viral.

With AI startups booming, nap pods and Silicon Valley hustle culture are back

OpenAI’s Superalignment team, responsible for developing ways to govern and steer “superintelligent” AI systems, was promised 20% of the company’s compute resources, according to a person from that team. But…

OpenAI created a team to control ‘superintelligent’ AI — then let it wither, source says

A new crop of early-stage startups — along with some recent VC investments — illustrates a niche emerging in the autonomous vehicle technology sector. Unlike the companies bringing robotaxis to…

VCs and the military are fueling self-driving startups that don’t need roads

When the founders of Sagetap, Sahil Khanna and Kevin Hughes, started working at early-stage enterprise software startups, they were surprised to find that the companies they worked at were trying…

Deal Dive: Sagetap looks to bring enterprise software sales into the 21st century

Keeping up with an industry as fast-moving as AI is a tall order. So until an AI can do it for you, here’s a handy roundup of recent stories in the world…

This Week in AI: OpenAI moves away from safety

After Apple loosened its App Store guidelines to permit game emulators, the retro game emulator Delta — an app 10 years in the making — hit the top of the…

Adobe comes after indie game emulator Delta for copying its logo

Meta is once again taking on its competitors by developing a feature that borrows concepts from others — in this case, BeReal and Snapchat. The company is developing a feature…

Meta’s latest experiment borrows from BeReal’s and Snapchat’s core ideas

Welcome to Startups Weekly! We’ve been drowning in AI news this week, with Google’s I/O setting the pace. And Elon Musk rages against the machine.

Startups Weekly: It’s the dawning of the age of AI — plus,  Musk is raging against the machine

IndieBio’s Bay Area incubator is about to debut its 15th cohort of biotech startups. We took special note of a few, which were making some major, bordering on ludicrous, claims…

IndieBio’s SF incubator lineup is making some wild biotech promises

YouTube TV has announced that its multiview feature for watching four streams at once is now available on Android phones and tablets. The Android launch comes two months after YouTube…

YouTube TV’s ‘multiview’ feature is now available on Android phones and tablets

Featured Article

Two Santa Cruz students uncover security bug that could let millions do their laundry for free

CSC ServiceWorks provides laundry machines to thousands of residential homes and universities, but the company ignored requests to fix a security bug.

2 days ago
Two Santa Cruz students uncover security bug that could let millions do their laundry for free

TechCrunch Disrupt 2024 is just around the corner, and the buzz is palpable. But what if we told you there’s a chance for you to not just attend, but also…

Harness the TechCrunch Effect: Host a Side Event at Disrupt 2024

Decks are all about telling a compelling story and Goodcarbon does a good job on that front. But there’s important information missing too.

Pitch Deck Teardown: Goodcarbon’s $5.5M seed deck

Slack is making it difficult for its customers if they want the company to stop using its data for model training.

Slack under attack over sneaky AI training policy

A Texas-based company that provides health insurance and benefit plans disclosed a data breach affecting almost 2.5 million people, some of whom had their Social Security number stolen. WebTPA said…

Healthcare company WebTPA discloses breach affecting 2.5 million people

Featured Article

Microsoft dodges UK antitrust scrutiny over its Mistral AI stake

Microsoft won’t be facing antitrust scrutiny in the U.K. over its recent investment into French AI startup Mistral AI.

2 days ago
Microsoft dodges UK antitrust scrutiny over its Mistral AI stake

Ember has partnered with HSBC in the U.K. so that the bank’s business customers can access Ember’s services from their online accounts.

Embedded finance is still trendy as accounting automation startup Ember partners with HSBC UK

Kudos uses AI to figure out consumer spending habits so it can then provide more personalized financial advice, like maximizing rewards and utilizing credit effectively.

Kudos lands $10M for an AI smart wallet that picks the best credit card for purchases

The EU’s warning comes after Microsoft failed to respond to a legally binding request for information that focused on its generative AI tools.

EU warns Microsoft it could be fined billions over missing GenAI risk info

The prospects for troubled banking-as-a-service startup Synapse have gone from bad to worse this week after a United States Trustee filed an emergency motion on Wednesday.  The trustee is asking…

A US Trustee wants troubled fintech Synapse to be liquidated via Chapter 7 bankruptcy, cites ‘gross mismanagement’

U.K.-based Seraphim Space is spinning up its 13th accelerator program, with nine participating companies working on a range of tech from propulsion to in-space manufacturing and space situational awareness. The…

Seraphim’s latest space accelerator welcomes nine companies

OpenAI has reached a deal with Reddit to use the social news site’s data for training AI models. In a blog post on OpenAI’s press relations site, the company said…

OpenAI inks deal to train AI on Reddit data

X users will now be able to discover posts from new Communities that are trending directly from an Explore tab within the section.

X pushes more users to Communities

For Mark Zuckerberg’s 40th birthday, his wife got him a photoshoot. Zuckerberg gives the camera a sly smile as he sits amid a carefully crafted re-creation of his childhood bedroom.…

Mark Zuckerberg’s makeover: Midlife crisis or carefully crafted rebrand?

Strava announced a slew of features, including AI to weed out leaderboard cheats, a new ‘family’ subscription plan, dark mode and more.

Strava taps AI to weed out leaderboard cheats, unveils ‘family’ plan, dark mode and more

We all fall down sometimes. Astronauts are no exception. You need to be in peak physical condition for space travel, but bulky space suits and lower gravity levels can be…

Astronauts fall over. Robotic limbs can help them back up.

Microsoft will launch its custom Cobalt 100 chips to customers as a public preview at its Build conference next week, TechCrunch has learned. In an analyst briefing ahead of Build,…

Microsoft’s custom Cobalt chips will come to Azure next week

What a wild week for transportation news! It was a smorgasbord of news that seemed to touch every sector and theme in transportation.

Tesla keeps cutting jobs and the feds probe Waymo