IVIX

FinTech for public needs

IVIX is developing AI to help governments identify and collect $6 trillion in lost tax revenue each year

ABOUT IVIX

Summary

  • Founded in 2020
  • Funding total: $13 million (seed round, July 2021)
  • Investors include Team8 Capital, Cardumen Capital, Citi Ventures
  • HQ: Tel Aviv, Israel and New York, US
  • FTEs: 11-50
  • Has several key clients and partners in OECD countries
  • Key executives: Matan Fattal, co-founder and CEO: started his career in an elite unit of the Israeli Intelligence Corps, co-founded and led cybersecurity scaleup Sliverfort; Doron Passov, co-founder and CPO: served in a secret technology unit in the Israeli Defence Forces, senior product manager at cybersecurity R&D startup Gita Technologies.

profile

Strengthening the economy and combating tax evasion are priorities for policymakers around the world. Former Secretary of the US Treasury Larry Summers asserts that over the next 10 years, the Internal Revenue Service (IRS) is on track to collect $7 trillion less than is owed – around 3 percent of the country’s GDP. 

“[The IRS’s] technology is woefully outdated,” notes Summers. However, the Biden administration’s plans to Build Back Better aim to change that by funneling $80 billion to the IRS, part of which would enable the tax authority to use technology to collect all the payments that they are owed. 

Globally, tax evasion is estimated to cost governments $6 trillion in lost revenue each year. Israeli startup IVIX, which is currently in stealth mode, has developed an artificial intelligence-powered platform to help governments identify tax infringements by analysing both their own and publicly-available data. 

Already active in several OECD countries, IVIX secured a $13 million seed round led by Team8 in July 2021. “Our ability to scale, combined with our accuracy rate that exceeds 98%, is transforming authorities’ ability to deter tax evasion, increase compliance, and level the playing field,” notes Co-founder and CEO Matan Fattal.

plans for 2022

IVIX has their eyes on growth for 2020. They plan to recruit employees, particularly in sales and marketing.

who should connect with this company

Public sector tax authorities that are looking to collect revenue more efficiently and reduce tax non-compliance.

company in action

IVIX published an analysis of the US short term rental (STR) market and found that tax authorities are losing an estimated $3 billion each year from $8.6 billion in unreported STR revenue. When IVIX’s algorithms examined anonymised data on millions of public hosts’ profiles on websites like Airbnb and VRBO, they uncovered that the real size of the STR market is close to $30 billion a year – almost double previous estimates of the STR market.

In the US, STR providers are only required to issue tax forms for hosts that exceed $20,000 in yearly revenue or have more than 200 transactions per listing. However, IVIX’s research shows that over one third of hosts make less than $20,000 per year and that the average listing has 20 bookings per year. Without these tax forms, it is more likely for hosts to under-report earnings. The relatively small amount of revenue per listing, and the fact that many transactions involve parties that are residents of different states, makes them difficult for tax authorities to track.

Read more about the issues with tax collection for the short term rental market by downloading IVIX’s report.

stateup view

In the current policy environment, governments are looking for ways to increase their revenue to offset expenditure. In October 2021, The Organisation for Economic Co-operation and Development (OECD) announced that 136 countries had reached an agreement to impose a 15% minimum tax rate on multinational enterprises. The timing is right for the launch of IVIX’s tool to help governments more efficiently collect taxes.

IVIX’s early success is a good indication of its product-market fit. Its board of advisors include three former IRS executives with extensive experience in private sector tax law, signalling a strong position to enter the US market.

GET ACCESS TO THE FULL REPORT

Enter your email to download the full Stateup21 report: