What Avalara’s IPO Means for Legacy Tax Software (and Why It’s Time to Switch to Kintsugi)

Avalara’s IPO makes it part of the old guard — a tax automation system that’s slower, more complex, and investor-driven. For users, this could mean higher pricing and reduced flexibility.

An IPO might be great for investors, but for businesses that rely on Avalara’s software, it signals a shift from customer-focused innovation to shareholder-driven priorities. If your tax software suddenly feels more expensive, less flexible, and a little less “automated,” you’re not imagining it, you’re just seeing what happens when legacy software goes corporate.

What Is Avalara’s IPO?

When a company goes public, it undergoes an Initial Public Offering (IPO) by filing with the Securities and Exchange Commission (SEC), disclosing its financials, and working with investment banks to set its stock price. Avalara filed for its S-1 registration statement with the SEC on May 11, and it was completed on June 15, 2018, when it began trading on the New York Stock Exchange under the ticker symbol AVLR.

Private companies turn to IPO to sell shares to the public and raise capital. Going public gives the company access to more capital and more clients. For Avalara’s case, the move enabled it to raise around $180 million, fueling its growth and global expansion.

Additionally, the timing coincided with the US Supreme Court’s Wayfair decision, which increased demand for automated sales tax compliance.

Here’s an overview of Avalara’s IPO:

• Raised roughly $180 million USD in proceeds.

• Valued the company at about $1.5 billion at the time of listing.

• Positioned Avalara as a public SaaS leader in the tax compliance automation space.

Why Avalara Went Public

The IPO’s purpose was to help Avalara scale faster and capture this growing market.  Avalara went public to:

• Raise capital for growth and develop new integrations

• Increase exposure in the market

• Provide liquidity for investors and employees

Additionally, it could be a strategic timing move, coming right after the US Supreme Court’s 2018 South Dakota v. Wayfair decision, which allowed states to collect sales tax on remote (online) sales. This ruling suddenly expanded the need for sales tax automation tools, making Avalara’s offering especially relevant.

What Happened After the Avalara's IPO

Avalara’s 2018 IPO helped it expand after it invested in new integrations, global reach, and the enterprise market. Unfortunately, the move also comes with drawbacks, as becoming a public company shifts its priorities toward shareholder returns rather than customer experience.

In 2022, Vista Equity Partners acquired Avalara for $8.4 billion, taking Avalara private. However, the company wishes to return to the public market and filed a US IPO in July, per CNBC.

Avalara experienced accelerated growth post-IPO, but so did its operational and pricing complexity. It invested aggressively in expansion through more acquisitions, integrations, and enterprise features.

Customers eventually reported higher pricing and reduced flexibility. But Avalara’s focus also shifted to investor growth metrics and large-enterprise deals.

With Avalara planning an IPO again, customers could expect changes to pricing models once the process is complete. It will also make Avalara a legacy tax software provider, prompting businesses to seek alternatives such as Kintsugi.

Why It Matters for Businesses

When a tax software company goes public, investors celebrate, but customers often end up footing the bill. Avalara’s IPO isn’t just a headline; it’s a hint that it might be time to rethink who your sales tax software really serves.

1. Potential for higher pricing

When a company prepares for an IPO, it often shifts from a purely customer-focused to an investor-focused approach. This means subscription increases, new fee layers, or fewer inclusions in base plans. For a business using Avalara, that could translate into rising tax-software costs, putting pressure on budgeting and margins.

2. Support and service may change

As the company’s priorities pivot toward growth metrics and public-market optics, support responsiveness, and dedicated account management may get less attention. That means existing customers might experience slower onboarding, fewer escalation options, or more self-service rather than white-glove support.

3. Operational & integration disruption risk

An IPO typically triggers internal reorganizations, platform updates, or shifts in the product roadmap that can impact stability or backward compatibility. For a business, this means tax-automation flows that were working might need retesting and additional validation, and there’s a higher risk during peak sales periods.

4. Vendor may focus more on enterprise segments

Once public, the vendor may pursue larger deals, enterprise pricing tiers, and feature sets aligned with big clients, sometimes at the expense of smaller/medium customers. If your business is mid-market or high-volume ecommerce, you might be deprioritised or moved into a more expensive tier.

5. Less flexibility and more rigid licensing

Public-market imperatives can push vendors to standardise offerings, lock down discounting, reduce flexibility in contract terms, or enforce tiered add-ons. That means your previously negotiable terms might become firmer, with less room for customisation or cost control.

6. Migration and vendor-change risk increases

If you sense that the tax software provider is becoming less aligned with your business model (because of IPO-driven changes), you may face a more costly or complex migration when you do decide to switch. In other words, the earlier you act, the easier the changeover, but waiting may raise switching costs and risks.

7. Strategic misalignment with your business goals

Private businesses prioritize cost agility, transparent and predictable pricing, and customer support. However, public vendors are after revenue and shareholder returns. This could mean misalignment between the features you paid for and the processes that slow down your operation.

Why It's Time For Avalara Users to Switch to Kintsugi

Avalara’s IPO changes more than its stock symbol, it changes its priorities, too. When a company becomes accountable to shareholders, customers often move from being the mission to being the metric. Here’s why forward-thinking merchants and SaaS founders are making the switch to Kintsugi.

Kintsugi Puts Customers Before Investors

Going public leads to higher pricing, complicated contracts, and unsatisfactory support. If you want the best for your business, choose a partner with a customer-first approach.

Kintsugi prioritizes customer experience. It offers flexible, transparent pricing, responsive human support, and product decisions driven by user feedback —not quarterly earnings calls.

While legacy providers optimize for Wall Street, Kintsugi optimizes for your checkout flow, compliance accuracy, and peace of mind.

Seamless, Modern Integrations Without the Legacy Baggage

Avalara has evolved through acquisitions, which creates irregularities. Customers have to manage multiple logins, which is inconvenient. There were also some reports about inconsistent data syncs and unexpected integration fees.

Kintsugi offers seamless and modern integration with billing, payment, and HR systems. It offers no-code integration with Shopify, Stripe, WooCommerce, and more. It simplifies setup, keeps data in sync, and streamlines tax compliance.

Kintsugi has no middle layers, no “version migration” surprises. It just connects with its intuitive system designed for agility.

Continuous Compliance Without Headaches

Post-IPO, Avalara must balance product innovation with investor expectations, which can slow feature releases and compliance updates. That’s risky when tax laws evolve weekly.

Kintsugi’s team moves fast and proactively updates tax rules and nexus thresholds, keeping your filings accurate without manual intervention.

You get real-time compliance, built-in transparency, and documentation that’s audit-ready from day one, so your finance team can finally stop worrying about what changed while you were closing a sale.

Avalara’s IPO could mark the moment it becomes legacy tax software. Kintsugi represents what comes next — modern, merchant-centric, and relentlessly transparent. Switching now means you’re not just changing vendors; you’re reclaiming control over how your business manages sales tax in a fast-moving digital economy.