Sovos grows with new investment
Sovos, which makes tax automation software, will receive a new round of funding led by majority investor Hg, while TA Associates will provide a significant minority investment. With the new injection of funds, Sovos plans to continue its geographic expansion, deepen its partner ecosystem, and respond to emerging tax and regulatory changes around the world.
The terms of the deal, which is expected to close in the second half of 2020 pending regulatory approvals and closing conditions, were not disclosed.
Hg first invested in Sovos in 2016. Fueled by the changing tax landscape, Sovos has grown significantly since then, having acquired more than 10 companies across North America, Latin America and Europe; more than doubled its customer base to 8,000-plus, including half of the Fortune 500 companies; and added more than 1,000 employees working across 10 countries. With the continuity of support from Hg and the added resources and experience from TA Associates, Sovos will advance its initiatives in adjacent segments.
“Hg’s new investment in Sovos is a sign of their confidence in our market, our position and our unique ability to deliver a complete solution for modern tax, including tax determination, continuous transaction control compliance and tax reporting,” said Andy Hovancik, CEO of Sovos, in a statement. “With the renewed support from Hg and the additional backing of TA Associates, Sovos is ready for the next stage of growth at a crucial time, as the digital transformation of government, technology and business converge.”
“In addition to strong organic growth generated from a robust recurring revenue model, Sovos has also executed on its targeted acquisition strategy, bringing new entrepreneurial founders into the business,” said Hg partner Jonathan Boyes, also in a statement. “As we move further into a world of digitized tax and regulation, Sovos is a trusted, future-ready solution for its multinational customers.”
“Sovos leads a large, acyclical, global sector driven by increasingly complex tax regimes,” said Hythem El-Nazer, managing director at TA Associates, in a statement. “Without a global solution, the rise of digital taxation has the potential to disrupt supply chain and finance transformation efforts. Sovos recognized that, and its leadership team has built the regulatory expertise, product innovation and business strategy to address it. We believe Sovos is ready to execute globally, and TA Associates is ready to support the company as it enters this next stage of growth.”