Libra announced it has raised $500,000 in a new seed round led by New York-based, seed-stage investment fund Liberty City Ventures.
The round, which coincides with the formal launch of its IRS-compliant accounting software LibraTax, also included participation from Raptor Ventures managing director James Pallotta and former Facebook software engineer and current BitGo CPO Ben Davenport.
Speaking to CoinDesk, Libra CEO Jake Benson indicated that the company intends to use the funds to build around its core product, creating a wide range of solutions for businesses and certified public accountants (CPAs) working in the bitcoin space.
Benson told CoinDesk:
“We have a feature-rich professional level tool that we’re working on now that allows CPAs to serve clients. That’s where we’re going with this, it’s not just a consumer tool. We need to build a version CPAs can use.”
The formal launch of LibraTax followed three months of testing during which volunteer CPAs helped to audit the software. Benson explained that this intensive trial was necessary given the legal obligation CPAs have to provide accurate information for clients.
LibraTax integrates with bitcoin services provider Coinbase and bitcoin wallet provider Blockchain, enabling both individuals and businesses to upload wallet transactions that are then assessed for overall capital gains and losses.
The company first launched in April following the announcement by the US IRS that it would assess capital gains on bitcoin transactions.
Building B2B partnerships
Benson noted the similarities between the solutions Libra is trying to build and the services offered by BitGo, the enterprise bitcoin security solutions provider of which new investor Ben Davenport is a founder.
In particular, Benson said that Libra and BitGo are exploring coordinated ways to serve their common customer base.
“While they’re providing enterprise security, I will likewise be providing enterprise-level accounting and profit and loss (P&L) tracking,” Benson said. “So yeah, they’re very complimentary services and we’re both excited to see how those opportunities flesh out.”
The company will offer two levels of service, a free service that allows businesses to process 500 transactions per year and a premium product, which allows up to 5,000 transactions. LibraTax Optimized, part of its premium product, bills businesses on a cost-basis method.
Expanding customer base
Benson suggested that Libra’s focus in the coming months will be on building out its services in an effort to broaden its customer base beyond individuals and bitcoin businesses to include tax professionals.
For example, he said that Libra is seeking to develop a new matching service that will allow bitcoin businesses to be paired with CPAs and tax professionals interested in filling what he called a market need.
“For accountants that are looking to grow their practice and take on clients, this is kind of a cool thing,” Benson said. “An account might think, ‘Hey if I can take on additional customers and fill this unmet demand, it’s a way for me to grow my practice’.”
The move suggests Libra could continue to grow, even if the number of enterprise-size bitcoin businesses seeking such solutions was slow to increase.