Y-combinator backed tax filing and investment platform ClearTax has acquired asset management platform Karvy’s goods and services tax (GST) filing business for an undisclosed amount.
The all-cash deal will bolster ClearTax's Goods and Services Tax (GST) clientele, the company said in a statement.
The deal comes at a time when Karvy was reportedly looking to sell its assets to repay banks and investors.
"ClearTax is acquiring only the GST business of Karvy Data Management Services, including its around 200 enterprise customers and 25 employees along with tech assets. The ownership of the entity will, however, continue to remain with the Karvy group of companies," Archit Gupta, founder and CEO of ClearTax, said in a statement.
ClearTax will also hire employees from the GST division of Karvy Data Management Services, the statement added. The company now has over 400 customers who are on SAP and it is working on integrating these customers with its e-Invoicing product. These customers will be using the entire suite of GST offerings from ClearTax.
“With this strategic acquisition, we will be able to quickly scale up our GST customer base. The new enterprises will benefit from all of our GST solutions, including e-Invoicing and will be able to comply with the new regulatory regime smoothly,” Gupta added.
This is ClearTax's third acquisition. It recently bought audio streaming platform Dose FM to build mobile products for medium to small enterprises.
Prior to this, the company had acquired a content discovery app TOOTL in April 2018 for an undisclosed amount.
ClearTax raised about $54.2 million in October 2018 led by Hong Kong-based investment Composite Capital Management as well as existing investors Sequoia Capital and SAIF Partners.
Founded in 2011 by Gupta, Ankit Solanki and Srivatsan Chari, Bengaluru based ClearTax provides software and services including tax filing, tax cloud, TDS returns, GST, Mutual Fund Investments, CA and legal services. The company is backed by Y Combinator and Composite Capital Management and has raised around $65 million in funding so far.
In the GST space, ClearTax competes with Cygnet, Tally, and CompuTax.
The platform claims to work with 60,000 chartered accountants and tax professionals and serves 1,000 large enterprises through its GST software.