Financing News: Freelance Fintech Startup Raises $8 Million; Electric car data platform raises $4.5 million

Co-founders of the Uri Bar-Joseph (left) and Shahar Plinner formations. (formations photo)

— Bellevue, Wash.-based financial services firm Formations has raised $8 million. The startup provides services and software to simplify and reduce taxes and other paperwork for the self-employed.

The company’s flagship product is a process to facilitate the formation of an “S-Corporation,” a corporate designation that often yields tax benefits. Owners can mark the money they receive from the company as salary or dividend, which can reduce self-employment taxes. Formations takes care of the paperwork.

Formations was founded in 2019 by tax and accounting Shahar Plinner and software marketer Uri Bar-Joseph. Plinner, who is CEO, was previously founder and CEO of Bellevue-based tax and accounting firm GPL. Bar-Joseph, who is COO, previously worked in marketing for Amazon’s Alexa and Mindspace, an Israeli global coworking company.

The number of unincorporated self-employed persons increased rapidly during the pandemic and now stands at more than 9 million.

Formations focuses on real estate agents to start with; in 2020 and 2021, more than 156,000 people entered the profession.

Each customer realizes about $8,000 in savings on average, and the company has served about 700 customers to date, a spokesperson said.

“Taxes are the biggest unmanaged business expense and one of the biggest surprises for taxpayers, especially for the self-employed,” Ryan Kruizenga, general partner at Arthur Ventures, said in a statement. Arthur, based in Minneapolis, led the Series A funding round.

The 57-employee company also announced a new partnership with payroll and benefits software company Gusto. The partnership builds on the existing one with Xero, which provides accounting software.

The company previously raised a $3.5 million seed round. Funders of that round included Avalara co-founder Rory Rawlings; Karat director Erez Yarkoni; Ran Nahmias, Seattle co-founder of Israeli cybersecurity firm Cyberpion; and Webb Stevens, Brian Heather, Amir Netz, Steven Schwartz, and Oudi Antebi. Total funding to date is $11.5 million.

Returning CEO Scott Case (right) with Dave Griffin, owner of Island E Cars on Orcas Island in Washington, and one of Recurrent’s early customers. (Recurring photo)

— Recurrent, a platform to help people make informed choices when buying used electric vehicles, has raised $4.5 million. The Seattle-based startup provides independent reports on the health of electric car batteries.

Recurrent also announced a new customer, the Del Grande Dealer Group in the Bay Area. The group will provide recurring reviews for its used electric vehicle offerings.

CEO Scott Case and CTO Kyle Rippey co-founded Recurrent. Case was previously Chief Operating Officer at EnergySavvy, a company that supports clean energy use. Rippey has worked at startups including, Estately and Avvo.

The company has 20 employees and raised a $3.5 million seed round in December 2020. Recurrent is a spin-out of Seattle’s Pioneer Square Labs.

New investors include Automotive Ventures, Goodyear Ventures, Hearst Ventures, Avesta Fund, MAP Investco, Circumference Group, Enertech Capital and E8 Angels. Existing investors also participated in the latest round, including Vulcan Capital, AAA of Washington, Wireframe Ventures, PSL Ventures, Ascend, Prelude Ventures and Powerhouse Ventures.

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