Filed Raises $17M to Automate Tax Preparation

A New Player Emerges in Accounting Software

A recently funded company, Filed, has entered the accounting software market with a $17.2 million investment, aiming to modernize existing processes.

The company intends to automate repetitive tasks currently burdening accounting professionals.

The Challenges Facing the Tax Industry

According to Leroy Kerry, Filed’s co-founder and CEO, the tax industry is experiencing significant difficulties.

He explained to TechCrunch that a large number of Certified Public Accountants (CPAs) are nearing retirement.

Simultaneously, there's a decreasing number of students choosing to pursue careers in the field, a trend highlighted in a 2021 report by the Association of International Certified Professional Accountants.

Automating the Tax Return Lifecycle

Kerry stated that firms are struggling with staffing shortages, impacting their ability to efficiently process tax returns.

Professionals are reportedly spending close to half of their time on routine, low-value tasks that could be automated.

To address this, Kerry partnered with Atul Ramachandran, now the company’s CTO, to develop Filed.

Filed utilizes AI to manage the complete tax return process.

The system is designed to interpret documents, apply specific tax strategies based on each firm’s guidelines, and input data into their current software systems.

When the AI identifies situations requiring expert judgment, it alerts a human for review, ensuring human oversight while minimizing manual effort.

Differentiating Factors in a Competitive Market

While other companies like Black Ore and Basis offer tax preparation and accounting assistance, Kerry believes Filed stands apart.

He emphasizes that Filed’s AI is specifically designed for tax workflows.

Furthermore, it integrates directly with existing software, avoiding the need for clients to completely replace their current technology.

Investment and Funding

Northzone led Filed’s $17.2 million funding round, with additional participation from Day One Ventures and Neo.

A Personal Journey to Entrepreneurship

Kerry’s path to becoming a CEO is particularly noteworthy, given his upbringing.

Growing up in South London, raised by a single mother in public housing, he rarely encountered individuals from similar backgrounds in leadership positions.

“Being a CEO wasn’t something I saw possible,” he shared.

Despite this, he was determined to pursue a career in business.

He began working at a call center while completing his education.

Although his early academic performance wasn’t exceptional, he possessed a strong work ethic.

He pursued a degree in architecture, graduating and returning to sales work within the same week.

From Sales to Startups

Within a year, he advanced to a management role, serving startups as clients.

One of these startups achieved unicorn status, and Kerry subsequently joined their team.

This experience provided him with valuable insights into the venture capital and startup ecosystems.

He later served as a chief of staff at rapidly growing companies in both the U.K. and Sweden.

“Those years taught me how to build through chaos and stay relentlessly focused on the customer.”

Expanding to the U.S. and Future Vision

Driven by his ambition, Kerry relocated to the U.S. to launch his own venture.

He and his team conducted on-site research in tax offices in Colorado and Arizona, observing the continued reliance on traditional methods like paper and fax machines.

Filed plans to use the new funding to expand its team and recruit additional tax engineers.

Kerry envisions Filed evolving into the core AI infrastructure for the entire tax industry.

This includes transforming areas such as client communication, document handling, and audit preparation.

“The industry has been waiting for its AI moment, and we’re just getting started,” he concluded.