The studio is designed to take an idea and help nurture it into a venture that would be spun out into a commercial company. The first venture is LumaTax, which is targeting small businesses seeking help with sales-tax filings.
Seattle startup studio Pioneer Square Labs has launched its first company, LumaTax, and secured $2 million for it to grow.
LumaTax is developing technology to help small businesses file sales tax reports by reading through transactions, asking a couple of quick questions, then filling out a form. The company is led by entrepreneur and former California state auditor Robert Schulte.
LumaTax raised its initial funding from venture capital firms Madrona Venture Group and Greycroft Partners. Madrona is also an investor in Pioneer Square Labs, a venture that launched last year to come up with technology ideas and spin out companies.
Schulte has been working with Pioneer Labs since February, bringing LumaTax, a concept he had been thinking about for some time, to the studio. Schulte previously founded Taxcient, a similar service for large businesses. Taxcient merged with Seattle-based Avalara in 2010.
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Schulte worked with Avalara for a couple of years, and said he doesn’t expect LumaTax will have significant overlap. Avalara, which automates sales tax calculations for businesses, works mainly with larger businesses than those LumaTax is targeting.
LumaTax will cost customers between $20 and $50 a month; its target market consists of small companies such as restaurants or retail shops that operate in only one jurisdiction, which simplifies tax filing.
“It still feels to me that there’s about 20 million small businesses out there that are not being served by (technology),” Schulte said.
LumaTax plans to launch its services Oct. 1 to companies in California, with plans to expand quickly to other states.