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Soraban - The AI Accounting Assistant
Automating The Data Intake & Service Delivery Process for Tax Firms
This week’s Startup feature is soraban.com. Soraban is the client coordinator for accounting, revolutionizing the industry with AI-powered precision and efficiency so you can focus on your clients.
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Company & Team Introduction
Soraban is the intelligent AI tax coordinator that slashes your firm’s administrative tasks and manual entry work in half. The company was founded by Enoch Ko in 2021, an engineer with the perfect mix of expertise and technical skills. Previously, Enoch worked as a software engineering consultant, building complex web applications for various businesses, ranging from massive publicly traded companies like FirstSolar and GDMS to YC-backed and fright software startups. In 2018, his CPA helped him set up an S-Corp, which saved his consulting business tens of thousands of dollars. Enoch knew many others were in similar situations, missing out on thousands of dollars in tax savings each year, leading him to start a technology-enabled accounting firm to help self-employed individuals save thousands of dollars in taxes using S-corps, and he built various accounting software tools to help streamline processes for clients. In 2021, Knoch pivoted Soraban to focus on a much larger problem, helping other tax firms streamline processes and drive efficiency via AI-powered software tools. The company now has over 25 employees and is headquartered in Tempe, Arizona.
Product Overview
Soraban currently has 3 main tools in its product suite. The first is the “Collect” tool, which allows accountants to easily collect client documents and data via dynamic, easy-to-create, no-code forms and questionnaires and creates a centralized location for all client information. “Collect” also has many other valuable features, including tracking the status of all questionnaires, automatically converting all file submissions to PDF, and sending auto-reminders to clients via SMS, Email, and Voicemail. Soraban’s other flagship product is its “Deliver” tool, designed to ease the process of securely sharing and distributing completed work to clients. Key features of the “Deliver” product include a centralized location for client communication, sending real-time updates to clients about their documents and any required actions, and allowing clients to securely share completed client work via a SOC2-compliant platform that utilizes secure APIs to ensure secure document transfers. The third tool Soraban offers, which is currently in beta, is called “Connect”, which integrates various financial tools, including TaxWise, SmartVault, Drake Software, etc., allowing for seamless data transfers, reducing manual errors, giving a centralized view of all financial information and eliminates the need to switch between multiple different products constantly.
Total Addressable Market
The AI-powered accounting software market that Soraban operates in is currently exploding in adoption due to recent advancements in AI. MarketResearchFuture estimated the total addressable market for AI accounting to be as large as $3.48B in 2023 and is forecasted to grow at a rapid 25.56% CAGR, swelling the potential market opportunity for Soraban to ~$27B by 2032.
Business Model & The Numbers
Soraban operates using a simple consumption-based business model, charging customers on a per-return basis: $25/return to collect, $20/return to deliver, or $40/return for both collect and deliver. There is a minimum monthly purchase of 50 returns, so pricing starts from $1000-$2000/month, depending on which product(s) you use. The company is generating revenue (figure undisclosed), has found product-market fit, and revenues are growing double digits Month over Month.
Traction
Early adoption of Soraban’s platform has been encouraging. The company is already powering some of North America's largest and fastest-growing CPA firms, including YourBottomLine, DarkHorse CPAs, Real Estate CPAs, and Anomaly CPAs. Soraban’s participation in YC also brought some much-needed validation to the platform's security and helped establish Soraban as a credible player in the market, a difficult feat due to the sensitive nature of client’s personal and financial data.
Competitors
Soraban’s AI-powered software for tax professionals is positioned quite well in the industry, but like with any other massive market opportunity, it comes with some formidable competition. Notable competitors include:
StanfordTax - StanfordTax is a lower-cost competitor on the collections side, charging $480 for 50 returns + $10 per additional return. Still, it lacks many key features Soraban offers, such as handling return delivery, e-signatures, payment vouchers, etc.
SafeSend—SafeSend is a more established player in the market that offers similar tools to collect and distribute tax returns. However, it has weaknesses, such as its pricing not being transparent and Soraban providing a far superior intake organizer with dynamic questionnaires, while SafeSend just creates a digital file of the Lacerte organizer. SafeSend also lacks a similar offering to Soraban’s “Connect” product, which automatically extracts relevant data from client documents, reducing the potential for manual entry errors as data flows seamlessly from customer documents to tax forms.
Funding
Since its founding in 2019, Soraban has raised 4 rounds of funding. The company's first capital was via a WeFunder crowdfunding campaign in December 2021, raising $78k. The following investment Soraban received came from its participation in YCombinator’s W21 batch, receiving the standard $125k check for completing the program. The company also raised a tiny pre-seed round towards the end of 2021, raising an additional $125k from Y Combinator and Liquid2 Ventures. In May 2023, Soraban raised a proper seed round but did not disclose the amount raised; Venture Scout estimates approximately $4.4M. The capital came from a list of esteemed backers, including participation from Village Global, AZ-VC, Friále, PHX Ventures, and others.
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