a16z has led a $21 million Series A round in Sphere, an AI-native tax compliance platform founded by Nicholas Rudder. The company, which began as a pivot from Rudder’s previous edtech startup ScholarSite, was created to solve a persistent problem he faced: the complexity of global tax compliance. As an online marketplace, ScholarSite was responsible for collecting and remitting taxes on its full gross merchandise value, not just its commission, which required navigating a web of international tax rules, registrations, and filing deadlines. This became a major distraction from building the business. In 2023, Rudder rebranded the project as Sphere, turning it into a full-fledged tax compliance platform designed for fast-growing, globally expanding companies. The company now targets businesses in the Series B to IPO stage, helping them manage tax collection, registration, filing, and remittance across more than 100 tax jurisdictions worldwide. Sphere’s technology is built around an AI-driven engine called TRAM (Tax Review and Assessment Model), which ingests and codifies tax rules from every jurisdiction it supports. TRAM generates taxability determinations with full reasoning and citations, which are then reviewed and approved by Sphere’s human experts before being deployed into real-time tax engines. This ensures accuracy and eliminates the risk of AI hallucinations. The platform integrates directly with major billing systems like Stripe and Campfire, pulling transaction data to assess tax exposure automatically. Once a company registers for a new market through Sphere, the platform submits the application to local tax authorities and notifies the customer when registration is approved—enabling them to begin collecting taxes immediately. Sphere also handles automated filing and remittance, generating tax returns and deducting payments directly from customers’ bank accounts to pay authorities. Unlike legacy providers such as Avalara and Anrok, Sphere manages the entire compliance lifecycle in-house without relying on third-party consultants. While Stripe offers global tax calculation and collection, Rudder sees it as a partner rather than a competitor. Sphere is one of only three vendors with native integration into Stripe’s Billing and Checkout systems and supports use cases Stripe doesn’t cover, such as full end-to-end compliance. The funding round also included participation from Y Combinator and Felicis Ventures. Marc Andrusko, a partner at a16z, noted that the firm first encountered Rudder during his ScholarSite days and recognized his determination and execution ability. When Sphere emerged, a16z moved quickly to invest, impressed by the company’s deep local integrations and end-to-end automation. The new capital will be used to expand Sphere’s network of direct connections to tax authorities, grow its AI and engineering teams, and build an international sales force. Rudder’s goal is to make Sphere the essential compliance tool for finance teams entering new markets—handling not just sales tax, but all forms of transactional compliance that companies may not even be aware of.