Town Raises $18 Million to Develop Small-Business-Focused Tax Platform
Town, a startup founded by veterans of Google, Plaid and OpenAI, has raised $18 million.
The company announced the funding round Friday (March 14) along with the launch of its platform, designed to provide small businesses with the same tax advantages of big companies.
“Big corporations deploy entire tax departments to minimize what they owe, exploiting every loophole in the book,” the company wrote in a blog post.
“Meanwhile, small businesses either go at it alone or rely on an overwhelmed accountant, paying 30% more per employee in compliance costs while missing out on billions in tax advantages,” the post added, citing data from the House Committee on Small Business.
In addition, the company added, small businesses are facing a decline in service quality, primarily because of an increased shortage of qualified professionals.
To combat this, Town said it offers customers their own dedicated tax advisers, as well as “tax-tuned” automation for data collection tasks to find “the most relevant deductions for every kind of business.”
While small to medium-sized business (SMB) owners face a challenging landscape dominated by larger, wealthier competitors, research by PYMNTS Intelligence shows that these smaller merchants are confident in their ability to both survive and thrive.
According to the report, “A Good Year: Why SMBs Grew More Confident in 2024,” SMBs throughout last year showed greater optimism, with fewer reporting falling revenue.
In October 2023, 17% of SMBs said they had seen their revenues dip, but by November of last year, that figure had dropped to 15%.
“This trend of improving financial health was further reflected in the drop of businesses concerned about their survival — from 7.3% in January 2024 to just 5% for most of the year, with a slight uptick to 6.8% in November during the U.S. election season,” PYMNTS wrote last month.
The prospect of survival varied dramatically according to the size of the business surveyed for the report. Just 1.8% of smaller businesses with more than $1 million in annual revenue said they were worried about survival, compared to nearly 10% of companies with less than $150,000 in yearly revenues.
“Smaller companies with fewer employees were even more likely to fear failure, with 11.3% of businesses employing fewer than five people expressing doubts about their future,” the report added. “This highlights the resilience of larger SMBs, while smaller firms continue to face key challenges.”
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