Vertex acquires 'edge computing' startup

Tax technology company Vertex has bought Tellutax, an edge computing startup, in Vertex’s first acquisition since it went public last year.

Tellutax, based in Portland, Oregon, develops technology that’s designed to deliver tax software to the end user with greater scalability and easier management. Financial terms of the deal were not disclosed.

The acquisition may help King of Prussia, Pennsylvania-based Vertex compete with Avalara, another company that went public in recent years. Tellutax was founded in 2018 by two veterans in the tax automation world. Tellutax CEO Eric Ruud was formerly a managing director at Thomson Reuters, while chief technology officer Eric Christian co-founded Sabrix and led the design and development of its indirect tax software platform. Thomson Reuters acquired Sabrix in 2009.

“We believe Tellutax edge technology will extend our leadership in the enterprise market and accelerate our ecosystem expansion into next-generation payment and IoT platforms,” said Vertex president and CEO David DeStefano in a statement Monday. “This acquisition furthers our technology roadmap and hybrid cloud strategy, enabling us to serve customers in an increasingly hyper-connected environment.”

'Edge computing' is a distributed computing paradigm that aims to improve speed and save bandwidth by bringing data storage and computing processing closer together. Tellutax uses edge technology to process large amounts of transaction data where it’s needed. By optimizing the amount of tax content processed, it’s able to limit the data needed in a specific location and accelerate tax determinations.

When Vertex went public last July, De Stefano told Accounting Today about his expansion plans for the company (see story): “We will continue to innovate and bring new products to market,” he said. “That has been the hallmark of Vertex for 40 years. We continue to invest in tax content because that is so critical to how we differentiate and win successfully in the market. We’re also going to expand. We’re going to expand in Europe. We’re going to expand in South America, and we want to continue to invest in our partner ecosystem. The market opportunity is so significant that we believe that between the technology partners and the advisory community that we work with, those relationships continue to be nurtured.”

Earlier this month, one of its competitors, Seattle-based Avalara, also made an acquisition, buying Inposia Solutions, a German invoicing and tax reporting software company (see story). Vertex was expanding internationally even prior to its IPO. Last January, according to the Philadelphia Business Journal, Vertex bought a controlling interest in Systax Sistemas Fiscais, a transaction tax software company in Brazil.