By Gertrude Chavez-Dreyfuss
NEW YORK (Reuters) - CoinTracker, which tracks consumers' cryptocurrency taxes and portfolios, said on Thursday it has raised $100 million in funding from a slew of institutional investors and high-net-worth individuals.
The investment puts the company's valuation at $1.3 billion.
CoinTracker enables consumers to track their crypto portfolios across exchanges and wallets, helping users monitor their market value, investment performance, transactions and taxes.
The funding round was led by venture capital firm Accel, according to a statement from CoinTracker, with investors such as Initialized Capital, General Catalyst, Y Combinator Accuity, and Seven Seven Six, the venture firm of Reddit co-founder Alexis Ohanian, also participating.
All five institutional investors confirmed their participation in emails to Reuters.
The funds will be used to expand the company's personnel, maintain coverage of exchanges, blockchains, and other crypto sectors, as well as to scale customer support and content, CoinTracker said in its statement.
Crypto adoption has grown exponentially across multiple exchanges, wallets and applications, with an estimated 221 million global users buying and selling the digital currency as of June 2021. This has created challenges for investors in tracking their portfolio and staying tax-compliant.
"The biggest issue crypto holders face with tax compliance is that as soon as they transact with crypto beyond a single exchange, calculating taxes accurately becomes extremely difficult," Jon Lerner, chief executive and co-founder of CoinTracker, told Reuters in an email.
Historically, he said cryptocurrency tax compliance has been low. By the end of 2015, Coinbase (NASDAQ:COIN) had 5.9 million customers trading $6 billion in crypto. But between 2013 and 2015, the Internal Revenue Service is reported to have received only 800- 900 tax returns with crypto transaction, Lerner added.
Figuring out how to accurately report and manage taxes is where CoinTracker comes in, said Sagar Sanghvi, partner at Accel and CoinTracker board member.