Why We Invested in Numeral: The Tax Agency of Record (TAOR)

For decades, companies treated indirect tax (such as sales tax) as a back-office cost center, managed through spreadsheets, wire transfers, outsourced accounting firms, and software designed for businesses that sold in one state and filed quarterly. That operating model is obsolete in a global, real-time commerce and transactional world. Yet the category remains concentrated among a handful of incumbents that collectively generate $2 billion to $3 billion in annual revenue doing it the old way. 

Global tax compliance is hitting a structural breaking point, driven by over 100 countries shifting to real-time reporting, a 15% global minimum tax, and 3 million new tariff rates. The cost of failure is staggering, highlighted by an annual €128 billion EU VAT gap and $84 billion in IRS penalties. A sharply shrinking supply of CPA candidates means companies no longer have the human capital to manage this escalating burden of filing indirect taxation, manually.

The opportunity is not simply to build a better tax engine. It is to build a company that assumes responsibility for executing the compliance work itself, leveraging all the progress AI has made in last 36 months.

Enter Numeral

Numeral is building more than tax software. Its Tax Agency of Record model delivers the completed compliance outcome, including registrations, calculations, filings, remittance, and notice management, on behalf of customers.

The distinction matters. Software vendors provide tools but leave customers accountable for operating them. Outsourced tax firms provide labor, usually billed by the hour and expanded by hiring more accountants. Numeral instead contracts around the completed outcome: taxes registered, calculated, filed, remitted, and defended correctly. Customers retain control of their businesses while Numeral manages execution.

Numeral is AI-native because AI runs the delivery workflow rather than supplementing it. Specialized agents research tax law, reconcile data, prepare filings, navigate tax portals, and manage exceptions, while tax experts focus on matters requiring judgment and accountability.  

Today, Numeral executes more than 90% of tax filings without human intervention, operates in 64 countries, and integrates with more than 120 tax authorities. Each resolved exception can also improve the underlying system, allowing Numeral to expand its delivery capacity through software and compute rather than proportional headcount growth. 

What does this look like in action? When a tax lawyer resolves an exception, that work can be converted into reusable workflow logic, evaluation data, and new agent capabilities. Over time, this automation allows Numeral to increase delivery capacity through software and compute rather than proportional headcount growth.

The Tax Agency of Record is the commercial structure for this operating model. Employer of Record companies grew by assuming employment obligations that customers did not want to manage directly, then expanding into adjacent services. Numeral is applying a similar model to indirect tax by assuming responsibility for filings across all 50 states and international jurisdictions, supported by contractual accountability and a filing guarantee. 

Five advantages can strengthen the moat, with scale: 

1. Hundreds of thousands of filings across varied products and tax situations create a cross-customer knowledge base that is difficult to replicate. 
2. Explicit responsibility for execution makes the relationship more durable than a calculation API. 
3. Switching creates sufficient friction; requiring customers to reestablish registrations in more than 40 states, restore two-factor authentication, and rebuild relationships with Departments of Revenue. 
4. Integrations with Shopify, Stripe, and ERP systems embed Numeral in core workflows and vice versa. 
5. Greater filing volume improves its working relationships and trust factor with tax authorities.

Why Now

Avalara, Vertex, Thomson Reuters, and Sovos have built roughly $4 billion in combined ARR by serving mid-market and enterprise customers with partial solutions. None provides a highly automated, end-to-end product spanning calculation, registrations, filings, and remittance. Each also has gaps in user experience, customer support, or accessibility for smaller businesses. Those limitations create an opening for a provider built around complete execution.

Numeral’s go-to-market strategy reflects this positioning. Rather than replacing Vertex or OneSource, it can operate above those systems and target the labor and services required to run them. That positioning expands its opportunity beyond the underlying calculation engine.

The Opportunity & The Numbers

The global indirect tax compliance software market was worth approximately $8.4 billion in 2025 and is projected to reach $21.6 billion by 2034, an 11.1% CAGR. Software captures only part of the spending. The adjacent global tax advisory market represents another $40 billion to $45 billion, much of it still billed by the hour, while businesses also carry substantial internal operating costs. Retailers spend roughly $288,000 annually on compliance operations, 67% of mid-market retailers have incurred penalties related to noncompliance, and nearly 50,000 remote sellers in the United States remain out of compliance.

Numeral’s growth has been rapid and capital-efficient. Numeral has grown approximately threefold year over year for several years, serves thousands of customers, and is gaining traction in the mid-market. Its net dollar retention is approaching enterprise-software levels, indicating that customers expand their use of the product as their compliance needs grow. 

The Team

Our conviction also rests on the team. Numeral was co-founded by Sam Ross, CEO, who built direct-to-consumer businesses generating more than $100 million in revenue and previously worked in growth marketing at Airbnb, and Matt Duvall, CTO, an early Stripe engineer and Notion’s third engineering lead. They have recruited operators from Airbnb, Bain, Greenhill, and Marqeta. The team combines technical depth with direct experience of the compliance problems Numeral addresses.

We are participating in Numeral’s Series C financing because we believe its execution model can replace a fragmented and labor-intensive tax function with scalable infrastructure. We also see a significant opportunity in Asia-Pacific, where e-invoicing mandates and consumption-tax reforms are creating pressures similar to those already visible in Europe. 

Geodesic and I are excited to partner with Numeral.