Avalara plans 2026 IPO following private equity ownership

After entering the public market in 2018, Avalara was purchased by Vista Equity Partners in 2022 and taken private.

Since then, the company has spent years expanding its enterprise positioning and building out its automation solutions for ecommerce, SaaS, and marketplace sales channels. These changes have reshaped the Avalara brand and given the company a much stronger focus toward Fortune 500s and similarly large organizations.

Now, Avalara is reportedly preparing to return to public markets through a potential IPO that could take place in 2026. This would mark the company’s second public offering and could signal its next stage of growth after years of operational development.

In this article, we’ll take a closer look at how Avalara has evolved since going private, what led to the new IPO plans, and what these developments could mean for companies that rely on Avalara for tax automation.

Key takeaways

• Avalara is preparing to return to public markets after several years of private ownership following a 2022 acquisition by Vista Equity Partners.
• The company has increasingly focused on enterprise customers by investing more heavily in automation solutions for complex tax environments.
• While Avalara is a major player in tax automation, its recent enterprise focus and high costs have made it a poor fit for small and mid-market brands.

What is Avalara?

Avalara is a tax automation platform designed to help businesses calculate, collect, report, and file sales tax across multiple jurisdictions. Originally founded in 2004, the platform has grown into one of the largest providers of automated tax compliance software for a variety of industries and large enterprise organizations.

As a platform, Avalara’s key strength lies in its integrations. Where smaller platforms offer limited native integrations or API-only connectivity, Avalara can connect natively with accounting systems, ecommerce and marketplace solutions, ERP software and more to create a unified compliance network. When fully connected, Avalara can correctly calculate tax rates at checkout and generate reports used for compliance and filing at scale.

Because of the difficulties involved with deployment at the enterprise level, Avalara doesn’t offer a self-service experience.  Users can’t create an account on their own and instead must go through an account executive and onboarding process.

Simultaneously, Avalara is one of only a handful of platforms that has managed to position itself as a comprehensive compliance solution for brands operating at a global level. Companies that require advanced integrations, detailed reporting, or scalable compliance see Avalara as one of only a few organizations capable of supporting those needs.

Key Avalara features include:

• Automated sales tax calculation at checkout.
• Tax compliance at a global scale.
• Return preparation and filing automation.
• A vast integration library and partner network.
• Compatibility with niche, complex systems and networks.

As a brand, Avalara experienced rapid growth through the 2010s as ecommerce expanded and new regulations increased the complexity of sales tax compliance. In 2018, the company went public on the New York Stock Exchange, significantly expanding its visibility within the tax technology industry.

The original IPO came during a period of major change for online tax compliance. That same year, the U.S. Supreme Court ruled on South Dakota v. Wayfair, allowing states to require out-of-state businesses to collect sales tax. This decision dramatically increased demand for automation platforms capable of managing multi-state compliance.

However, after four short years on the market, Vista Equity Partners purchased Avalara for approximately $8.4 billion and took the company private. In 2025, Avalara filed for a second IPO, with experts estimating a 2026 launch.

Timeline of key events

• 2004. Avalara founded in Seattle to help automate tax compliance.
• 2018. Avalara goes public on NYSE.
• 2018. Wayfair decision expands state authority to enforce sales tax collection for online sellers.
• 2022. Vista Equity Partners acquires Avalara for $8.4 billion and takes the company private.
• 2025. Avalara begins framing itself as an AI-forward tax compliance company and files for second IPO, scheduled for 2026.

Why is Avalara pursuing another IPO?

While neither Avalara nor Vista Equity Partners has disclosed their precise reasons for reentering the public market, we can draw a few conclusions from their time away.

Since going private in 2022, Avalara has undergone a notable shift in market positioning. In the past, the company offered programs for smaller brands, including TrustFile and the Returns for Small Business (RSB) program. These have been discontinued, and their users have been forced toward more costly solutions such as Avalara Managed Services.

In recent years, Avalara seems to have expanded its focus on enterprise customers by expanding its partner network and removing services that don’t align with that customer base (often to the detriment of smaller organizations). At the same time, customers report a steady increase in prices over recent years, a notable dive in customer support, and aggressive upsells when interacting with company agents.

At the same time, investors are showing increased demand in technology IPOs, as AI-powered brands flood the market. This has prompted many brands — including Avalara, which has invested heavily in AI-powered compliance tools — to consider a public offering.

Taken collectively, these developments suggest that Avalara’s potential IPO is part of a broader strategy to position the company for its next phase of growth. With a stronger focus on enterprise customers and expanded automation capabilities, the company could be seeking to present itself as a mature platform with a strong emphasis toward supporting large organizations with complex compliance needs.

For businesses that rely on tax automation platforms, these changes could also influence how Avalara approaches pricing, product development, and customer support in the years ahead.

What Avalara’s IPO could mean for customers

For most businesses, a company’s IPO won’t immediately change the functionality of the software they rely on. However, returning to public markets can influence how a platform evolves over time, particularly in areas such as pricing, product development, and customer support.

Given the changes Avalara has already made in recent years, current customers may want to pay close attention to how the platform develops after a potential IPO. Smaller and mid-market businesses in particular may need to evaluate their long-term options if rising costs or shifting product priorities make the platform less accessible over time.

Here are several trends to watch if Avalara returns to public markets.

Increased pressure for revenue growth

When software companies enter the public exchange, they typically face increased demands from investors and shareholders to demonstrate consistent revenue growth and improved margins. Shareholders want dividends, and investors want a profitable exit strategy.

This can heavily influence how a company structures its pricing or prioritizes its product development, with the most profitable course of action winning out over other alternatives. This profit incentive can also determine which types of customers receive the most attention. Avalara already locks actionable support behind premium support plans, but profit pressure from the public sphere could further exacerbate the problem.

A continued shift toward enterprise customers

Many of Avalara’s recent product and service changes suggest a growing emphasis on enterprise deployments. The discontinuation of programs aimed at smaller brands, coupled with the poor support experience that small and mid-market owners regularly report, suggests that Avalara’s attention is focused on expanding enterprise partnerships.

If this positioning is attractive enough as part of the IPO, the company could lean more heavily into that business angle. Doing so would further limit development for product features that might benefit smaller organizations.

Potential changes to pricing and service structure

For customers currently using Avalara, the biggest long-term impact may come from how the platform adjusts its pricing in the wake of a successful IPO.

For deeply integrated enterprise brands, rising costs may not be enough to endure the pain of removing Avalara and switching to another provider. However, smaller brands will feel the pinch more quickly and may find themselves priced out of the Avalara ecosystem altogether.

This has already happened in some cases, with mid-market and smaller brands jumping ship in the face of year-over-year price increases and lengthy contractual lock-ins. As pricing scales more toward enterprise customers, small and mid-market businesses looking for a complete solution with Avalara may end up paying well above rates offered by platforms better geared toward smaller teams.

Alternatives for Avalara users

Businesses reviewing their long-term options with Avalara may want to explore other tax compliance solutions that better align with their size, technical needs, or budget.

While tax automation is a niche component of business operations, several providers are available and specialize in different market segments. Some are direct Avalara competitors while other solutions are designed for a specific business model, such as ecommerce or SaaS.

Some alternatives worth considering include the following:

• Vertex is an enterprise-grade tax solution built for multinational organizations. The platform offers advanced tax calculation, reporting, and regulatory compliance tools that integrate with major ERP systems. Similar to Avalara, Vertex is primarily suited for enterprise-grade companies, Fortune 500s, and teams operating at a significant global scale. Vertex is a publicly traded company.

• Sovos is another tax compliance software with a global footprint and an enterprise focus. Like Vertex and Avalara, the platform can cover sales tax, VAT, and other forms of indirect compliance while integrating deeply with most ERP, financial, and checkout systems. Sovos is not a publicly traded company.

• TaxCloud focuses on automated sales compliance for growing mid-market brands in the ecommerce and SaaS space. Our platform offers done-for-you tax calculations, return preparation, and filing tools to simplify compliance without the complexity or cost often associated with enterprise platforms. For many smaller companies, TaxCloud provides similar functionality to larger tax solutions while maintaining simpler pricing and deployment. TaxCloud is not a publicly traded company.

• TaxJar is part of the Stripe ecosystem and offers sales tax automation tools that integrate with ecommerce platforms and marketplaces. This solution is particularly popular for Shopify and Amazon sellers who want an easy way to track nexus and calculate taxes, but it only offers limited support for filing. TaxJar is privately held by Stripe, which also remains private despite years-long rumors of a public IPO.

• Anrok is a tax compliance solution built primarily for SaaS companies and subscription-based businesses. This platform automates sales tax, VAT, and global compliance for digital products, making it a strong fit for software companies that sell across multiple regions. Anrok is not a publicly traded company.

While each of these platforms approaches tax automation differently, the right choice will ultimately depend on a company’s size and integration needs. Enterprise brands may prefer scalability and ERP integrations while small companies need automation and simplified pricing.

We recommend taking the time to assess the factors that are critical to your compliance operation before searching for an Avalara alternative.

Next steps for Avalara users

Businesses currently using Avalara don’t need to make immediate changes in light of the planned IPO.

In most cases, a successful IPO won’t change anything overnight. Even if the offering is successful and Avalara goes public, users are likely to see a transition period before the company begins to adapt to its new position in the market.

However, it’s still a good time for brands to assess whether the platform will be a good long-term fit when it comes to factors like compliance and cost.

If your organization relies on Avalara for tax automation, consider taking the following steps:

1. Review your current contract and renewal timeline. Avalara is known to use annual or multi-year contracts to lock users to the platform. Understanding your renewal dates and cancellation terms can help you avoid being locked into an agreement if your needs change or the company moves in a direction that doesn’t align with your needs.
2. Evaluate your current tax automation requirements. Especially for smaller teams, taking the time to understand the systems your team relies on for tax calculation and filing may reveal alternative pathways to compliance. Many smaller brands can save thousands by switching from Avalara to smaller solutions like TaxCloud that support mid-market brands.
3. Audit your integrations and workflows. Tax automation tools are usually connected to ecommerce platforms, ERPs, accounting systems, and marketplaces. Depending on your setup, other solutions may work as well or even better than Avalara. For example, if you’re using Avalara to integrate with Shopify and BigCommerce, solutions like TaxCloud can offer similar compliance at a fraction of the cost.
4. Get quotes well in advance of your renewal date. At TaxCloud, we’ve seen that many mid-sized brands can’t switch from Avalara very quickly.  Once integrated, it can take time to remove and replace Avalara with something else.  Combined with long contract lock-ins, it makes sense for companies to source competitors long before their Avalara contract expiry to get a better understanding of current compliance landscape.
5. Plan migrations carefully if switching providers. When users choose to leave, Avalara can be a notoriously difficult partner. Use a dedicated migration guide to make a clean break and swap over to a solution with minimal headaches. However, be careful when making the switch. Because Avalara locks users out of accounts when contracts expire, you’ll need to transition before your term with Avalara is up for renewal.

By evaluating existing configurations and contracts now, teams can stay ahead of potential changes as Avalara moves toward a public offering and beyond.

However, this process takes time.  TaxCloud regularly saves migrating Avalara customers around 30% because our platform is built specifically for mid-market brands, and our pricing structure reflects that.  In order to migrate in time, we’d recommend reaching out for a quote in advance so that your team has clear benchmarks and can plan for a future migration.

A simpler alternative for mid-market brands

Most companies don’t operate at an enterprise level, and introducing tax solutions scaled for enterprise teams will introduce unnecessary complexity and cost. While your team is evaluating your position with Avalara, take a moment to consider the scale and growth potential for your business, as well as the cost of partnering with an enterprise-focused brand.

If rising costs and the history of catering to larger brands have made Avalara harder to justify, TaxCloud is a great alternative. We offer automated tax calculations, return preparation, and filing tools for growing businesses. We also offer human-powered support without premium pricing tiers, gated access, or mandatory annual contracts.

Want to take a closer look? Sign up for a free 30-day trial, or get in touch with a product expert to learn how TaxCloud can automate tax compliance anywhere in the U.S and Canada.

FAQ

Is Avalara going public again?

Yes. In 2025, Avalara filed for a new IPO after years of private equity ownership. The company was previously taken private in 2022 by Vista Equity Partners after being acquired for $8.4 billion.

Why did Avalara go private in 2022?

While Vista Equity Partners never disclosed the reasoning behind the decision to go private, private equity firms often do so to restructure operations, improve margins, and reposition the business before relaunching.

Since being taken private, Avalara’s focus has shifted more heavily toward enterprise firms, while services and products catering to small and mid-market users have been discontinued or removed.

Will Avalara’s IPO impact current customers?

Customers are unlikely to see any immediate changes following the IPO.

However, over time, pressure from shareholders and investors can influence decisions around cost, product development, and the company’s long-term strategy. Post-IPO, these changes are likely to be reflected in Avalara’s product and service offerings as it tries to align with expectations for revenue growth.

What alternatives to Avalara exist?

Several tax automation platforms offer alternatives depending on a company’s size and compliance needs.

Enterprise organizations may look at solutions like Vertex or Sovos, while small and mid-market companies might be best served by solutions like TaxCloud, TaxJar, Anrok, or similar options.