When Nicholas Rudder was building his previous startup — the edtech marketplace ScholarSite — he kept hitting the same wall: tax compliance. “Marketplaces are liable for tax on their entire GMV, not just their take rate. Every new country meant registrations, filings, deadlines, and constant risk,” Rudder told TechCrunch. “It became a distraction. Instead of building the business, I was decoding international tax rules I never wanted to be an expert in.” As ScholarSite wound down, Rudder kept the name “Sphere” and reimagined it entirely. “The world was going global, but compliance infrastructure hadn’t kept up,” he said.
Rudder founded Sphere in 2023 as an AI-native tax compliance platform for companies scaling across borders. Today, the firm targets Series B to pre-IPO companies with international customers, helping them collect, calculate, file, and remit taxes worldwide.
“We help companies collect tax on customer transactions,” Rudder explained. “They’re required to remit that tax monthly or quarterly — and Sphere automates the entire lifecycle.”
The startup spent two years in stealth. Its customer base now includes Lovable, Replit, and ElevenLabs.
Originally, the team had raised a $4.3M seed as an edtech marketplace. This week, as a compliance platform, the company announced a $21 million Series A led by a16z, with participation from YC, Felicis Ventures, and others.
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How it works: 24-Hour Setup, AI-Assisted Determinations
Sphere integrates with billing platforms like Stripe and Campfire, pulling transaction data to assess global tax exposure.
At the heart of the platform is the AI engine, TRAM (Tax Review and Assessment Model).
“TRAM ingests and codifies rules for every jurisdiction and produces tax determinations — what is taxable, what isn’t — with reasoning and citations,” Rudder said.
A human team reviews TRAM’s outputs before they feed into the real-time tax engine, which applies tax without using AI, ensuring “zero chance of hallucinations.”
The AI Engine also tracks how much tax companies owe across regions and has direct integrations with more than 100 tax authorities worldwide.
“Companies can register in new jurisdictions directly through Sphere,” Rudder said. “We handle submission, track processing, and notify them when they can begin collecting.”
For filings and remittances, Sphere automatically generates returns, debits customer bank accounts, and pays tax authorities — providing a genuinely end-to-end compliance solution.
Competition, Differentiation, and Stripe Partnership
Sphere competes with legacy players Anrok and Avalara, but Rudder doesn’t see Stripe Tax as a direct rival.
“Sphere is one of only three tax vendors globally with a native integration into Stripe Billing and Checkout,” he said. Sphere also manages the full compliance cycle — capabilities Stripe doesn’t offer.
Why a16z Backed the company
Rudder describes the fundraising process as “unintentional,” but when he met a16z, “we knew they were the right partner.”
Marc Andrusko, partner at a16z, said the firm first met Rudder during the ScholarSite era.
“It was clear Nick had the horsepower, grit, and drive to be an exceptional founder,” Andrusko said. After hearing strong feedback on Sphere, a16z moved quickly.
What impressed him most was Sphere’s deep local integration:
“Legacy vendors often outsource geographies to third-party firms. Sphere built its own local integrations and AI automations, enabling it to handle tax compliance end-to-end globally.”
What’s Next: Global Expansion and Full Compliance Coverage
With the new capital, Sphere plans to:
- Expand integrations with more tax authorities worldwide
- Grow its AI and engineering teams
- Build an international sales organization
“I want Sphere to be the indispensable tool finance teams rely on when they expand into a new market,” Rudder said. “Not just for indirect tax — for every type of transactional compliance they didn’t even realize they were exposed to.”
