Startup Rebuilds Itself to Solve Global Tax Challenges for Scaling Companies
Sphere raised a $21 million Series A led by a16z after pivoting from an edtech marketplace named ScholarSite into an AI-native tax compliance platform. Founder Nicholas Rudder said the idea emerged from his experience trying to navigate marketplace tax obligations, where companies are liable for tax on their full gross merchandise value rather than their take rate. He described the previous process as a maze of registrations, filings, deadlines, and exposure to risk across each new country.
Pivot Leads to New Product Focused on Automated Tax Infrastructure
Rudder and co-founder Adrian Sarstedt originally planned to wind down ScholarSite before deciding to keep the Sphere name and relaunch it in 2023 as a tax software vendor. Sphere now targets Series B through IPO-stage companies operating internationally. It automates registration, calculation, filing, and remittance requirements. The company spent two years in stealth, and customers now include Lovable, Replit, and AI voice startup ElevenLabs. As an edtech product, the company had previously raised a $4.3 million seed round.
AI Engine TRAM Codifies Global Tax Rules With Human Review
Sphere integrates directly with billing platforms such as Stripe and Campfire to import transaction data and assess global tax exposure. Its AI review and assessment system, TRAM, ingests rules across jurisdictions and produces determinations about whether transactions are taxable, including reasoning and supporting citations. Sphere’s human reviewers approve TRAM’s outputs before they enter a tax engine that applies taxes to transactions in real time. Rudder said the tax engine itself contains no AI to avoid hallucinations.
Direct Links to More Than 100 Tax Authorities Worldwide
Sphere monitors how much tax a company owes in each region and offers direct registration links to more than 100 tax authorities globally. After companies submit registration information, Sphere sends documentation to the relevant authorities and informs customers when approval is processed. The platform also automates filings and remittances by generating tax returns, debiting funds for owed tax, and paying authorities directly.
Competitive Landscape Includes Legacy and Modern Providers
Rudder said the company does not view Stripe’s global tax product as a competitor and considers Stripe a partner. Sphere is one of three tax vendors with native integration to Stripe Billing and Checkout. Other competitors in the category include Anrok and Avalara, as well as newer venture-backed entrants that rely more heavily on third-party consulting partners for geographic coverage.
a16z Says Early Signals Suggested Sphere’s Potential
Marc Andrusko, a partner at a16z, said the firm first met Rudder during the ScholarSite era. He said Rudder demonstrated the persistence and capability needed to build a successful company. Andrusko said the firm later began hearing positive feedback about Sphere’s early performance and quickly reconnected when they learned Rudder was behind the pivot. He pointed to Sphere’s deep integration into local markets and its use of AI-driven automation as key differentiators.
Funding Will Support New Integrations and Global Expansion
The new capital will be used to expand infrastructure for connecting with more tax authorities, grow the AI and engineering team, and build an international sales operation. Rudder said the goal is to create a tool that finance teams rely on when entering new markets, covering indirect tax as well as other forms of transactional compliance.
Featured image credits: Freepik
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