Simplicity takes stake in tax tech company
Simplicity’s latest private equity investment is an 18.8% share in the parent company of two tax technology companies, Tax Traders and its startup business Taxi.
Tuesday, March 26th 2024, 6:40AM
by Andrea Malcolm
The investment will primarily be used to develop Taxi, a new company offering access to working capital for businesses, backed by their provisional tax payments.
Tax Traders, which started in 2012, is a tax pooling intermediary that works with accountants to give taxpayers more flexibility when paying provisional tax.
It is investing into its next venture – Taxi, which uses the same provisional tax framework to provide business funding.
Co-founders Josh Taylor and Nicola Taylor say securing capital to invest in Taxi is a critical part of scaling quickly.
“Taxi has the potential to have a huge impact for Kiwi businesses and New Zealand’s GDP, and we knew that securing an investment partner would mean we could scale quickly and see many more businesses benefitting faster,” says Nicola Taylor.
“We were very clear that we wanted a partner who shared a vision for this country and was interested in sustainable business results, rather than an investor who was solely focused on a short-term financial return.
“We are in business because we believe business can be a force for good and this requires a different approach to capital investment. In Simplicity, we found an investor whose values align with ours and who we knew would encourage us to make sustainable business decisions, in line with our DNA, not purely with a financial outcome,” she says.
Simplicity’s passive equity provides the company with another funding option instead of taking on debt or selling a major equity stake, says managing director Sam Stubbs.
The KiwiSaver provider’s private equity strategy is to take minority and passive equity stakes in unlisted Kiwi companies across different industries and remain for the long term. The preferred private equity investment is between $5-10 million to support established small-to-mid size private enterprises.
The new investment marks Simplicity’s sixth private equity investment. Others are Icehouse Ventures, Quantifi Photonics, Reliable Foundations, Pure Food Co and DataTorque.
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