Avalara has closed a deal to acquire Davo Technologies, which automates sales taxes for small businesses.
This is the Avalara’s 11th acquisition, and the first entered into this year. Terms of the deal were not disclosed.
Davo’s software automatically connects to point of sale systems to extract the amounts of tax owed, set sales tax funds aside daily, hold the funds, and then file and pay their sales taxes for them when they are due to state and local tax authorities. The idea is to provide an automated sales tax compliance solution that also ensures available funds for tax obligations to avoid unplanned or underfunded expenses.
Both Avalara and Davo share a “partner-first” model, prioritizing integrations to streamline tax automation as much as possible. Davo maintains strong partner relationships, particularly with point of sale software providers, and Avalara plans to harness this to address tax management for those partners’ small and mid-market customer bases.
“Avalara and Davo are natural extensions to one another; our services are complementary, and we believe there is an immediate opportunity for value to their customers and our shared partners,” said Jayme Fishman, executive vice president of corporate development at Avalara, in a statement. “The Davo team has built an excellent, customer-centric product and we are delighted to partner with them to help improve and expand upon their capabilities.”
Davo reports approximately 4,000 customers in the U.S., including coffee shops, bike stores, flower shops, bakeries, restaurants and many other types of local businesses; and integrates with commonly used point of sale systems.
The Davo system pulls tax monies daily from POS systems and holds the funds for future reporting and remittance to state and local tax authorities. Depending on the product offerings, business model and growth opportunities for each customer, Avalara will be able to further support Davo customers through additional product offerings, including licensing and registration, exemption certificates, custom data sets, pre-mapped universal product codes for taxability, omnichannel calculations and expanded returns services, as needed.
“This acquisition is an amazing opportunity for the Davo team, partners, and especially our customers. There has never been a more important time to support the local business community — the backbone to local economic development and community support,” said Pete Murray, CEO of Davo Technologies, in a statement. “We are confident that together with Avalara we can make their day-to-day even easier, so they can focus on their business and leave the sales tax to us.”
