Andreessen Horowitz (a16z) has led a $21 million Series A investment in Sphere, a company building AI-powered tax compliance software.

A16z Backs AI Tax Revolution with $21 Million Series A

Sphere announced a $21 million Series A led by a16z, with participation from Y Combinator and Felicis Ventures, bringing the company’s total funding to over $25 million. The startup represents a remarkable pivot story—it originally launched as ScholarSite, an educational marketplace that raised $4.3 million in seed funding, before transforming into an AI-native tax compliance platform in 2023. A16z partner Marc Andrusko noted he had tracked founder Nicholas Rudder since his ScholarSite days and quickly moved once it was clear Sphere was his next venture. This vote of confidence from one of Silicon Valley’s most prestigious firms validates the massive opportunity in automating what has traditionally been an expensive, manual, and consultant-heavy process for scaling companies.

TRAM Engine: The AI Brain Behind Tax Compliance

At the core of Sphere’s platform is TRAM, the Tax Review and Assessment Model, which uses artificial intelligence to navigate the labyrinth of global tax compliance. TRAM ingests and codifies the rules in every jurisdiction and creates a set of tax determinations along with reasoning and backing citations for that determination. The platform integrates seamlessly with major billing systems like Stripe and Campfire to pull transaction data and assess global tax exposure, with Rudder saying the product takes less than 24 hours to set up. Importantly, Sphere’s human team reviews and approves TRAM’s outputs before they’re pushed into a tax engine that applies tax to transactions in real time, striking a balance between AI efficiency and human oversight that gives finance teams confidence in the accuracy of their compliance.

Comprehensive Global Coverage Differentiates Sphere

What truly impressed a16z was Sphere’s end-to-end approach to tax compliance across jurisdictions. Andrusko highlighted that whereas both legacy players and many venture-backed startup competitors often hand customers off to third-party consulting firms to manage certain geographies, Sphere was integrated into local geographies. The company has built direct connections to over 100 tax authorities worldwide, managing the entire indirect tax lifecycle—including registration, calculation, filing, and remittance—without relying on external consultants. Current clients include fast-scaling platforms like Replit, Lovable, and ElevenLabs, companies that are expanding globally and need automated solutions that can keep pace with their growth.

From Founder Pain Point to Market Solution

Rudder’s motivation for building Sphere came from personal experience with the tax compliance burden during his previous venture. Managing tax compliance on gross merchandise value across multiple countries with ScholarSite created constant operational friction and distraction from core business priorities. This firsthand pain point drove him to build a solution that would eliminate the complexity for other fast-growing companies. The fresh capital will fund expansion into more jurisdictions, AI and engineering hires, and international sales operations as Sphere positions itself as the definitive system for any transactional compliance exposure. The company’s ambition extends beyond just indirect tax, aiming to become the comprehensive platform for all tax compliance needs as companies scale globally.