K1x, a US-based AI-native private markets tax data platform, has raised $175m in growth capital.
The funding was led by Sumeru Equity Partners, with existing investor Edison Partners also participating.
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The company’s patented platform uses an AI-native approach to streamline extraction, validation and distribution of tax data from K-1s, K-3s and 1099s, and simplifies Internal Revenue Service-certified 990 e-filing.
K1x intends to use the new funding to enhance its core platform, speed up product development and broaden the use of machine learning (ML) and generative AI (genAI) across its offering.
The company also plans to invest in customer support and overall client experience.
K1x CEO John LaMancuso said: “Where tax compliance in public markets runs like a Swiss watch, private markets still run on manual processes, unstructured documents and data, and fragmented systems that cannot scale.
“The complexity of K-1 forms, compounded by the increase in volume, proves that the operational strain is no longer seasonal – it is structural.
“We are excited to work with Sumeru on solving this ongoing tax data infrastructure problem.”
According to the platform, it supports 44 of the 100 largest US institutional investors and 20 of the top 25 accounting practices, among others.
With this capital infusion, Sumeru will take a majority stake in K1x, while Edison’s involvement marks its third investment in the company since 2022.
Commenting on the investment, Sumeru managing partner Kyle Ryland said: “Private market tax data is one of the last major workflows in financial services still running on manual processes and spreadsheets – K1x is purpose-built to change that.
“We look forward to partnering with the team to accelerate growth in a market that remains over 90% unserved and increasingly critical as the $20tn+ alternatives landscape expands, and investment structures grow in complexity.”
In January this year, GruntWorx teamed up with K1x to embed the latter’s technology into a new tax data processing solution aimed at accounting companies and tax practitioners.
