Onshore Raises $31M In Series B Funding Led By FPV Ventures

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How much did Onshore raise in its Series B funding?

Onshore, an AI powered platform for optimizing corporate tax incentives, recently raised $31 million in a Series B round, bringing its total funding to approximately $46 million. The funding appears to reflect strong investor confidence in AI driven tax automation, amid a market where an estimated $200 billion in tax incentives go unclaimed annually in the U.S.

How Onshore streamlines tax incentive processes?

Onshore, formerly known as SPRX, is a New York-based company founded in 2020 that specializes in using AI combined with expert oversight to help businesses identify, optimize, and defend tax incentives. Its core offerings include R&D tax credits, 179D energy efficient property deductions, and cost segregation studies. The platform streamlines processes that typically take traditional firms months, delivering results in weeks with minimal client effort. It has served over 500 companies across sectors like technology, energy, manufacturing, architecture, and agriculture, unlocking more than $600 million in incentives.

The Series B was led by FPV Ventures, with participation from Vertex Ventures, ADP Ventures, Y Combinator, and Restive Ventures. This follows earlier rounds, including a $500,000 accelerator investment in 2023 (likely from Y Combinator), a $3 million Series A in April 2023, and an additional Series A extension in October 2024. The capital is earmarked for expanding beyond tax credits into automated financial and accounting workflows for compliance and reporting.

This funding could accelerate Onshore’s growth in a competitive tax tech landscape, where AI is increasingly addressing inefficiencies. By focusing on precision and defensibility, the company aims to capture a share of the untapped $200 billion in annual U.S. tax incentives. However, success will depend on navigating regulatory complexities and scaling operations while maintaining accuracy.

Onshore’s $31 million Series B funding round marks a significant milestone for the AI powered tax optimization platform, formerly known as SPRX. This infusion of capital, led by FPV Ventures and supported by a consortium of notable investors including Vertex Ventures, ADP Ventures, Y Combinator, and Restive Ventures, elevates the company’s total funding to around $46 million. The round not only underscores growing investor enthusiasm for AI applications in financial services but also signals Onshore’s ambition to transform the traditionally opaque and inefficient tax services industry. By blending intelligent automation with human expertise, Onshore addresses a critical pain point: the estimated $200 billion in U.S. tax incentives that remain unclaimed each year due to outdated processes and high compliance burdens.

Founded in 2020 by Dominic Vitucci, a former professional at a top-tier accounting firm, Onshore emerged from frustrations with the conventional tax advisory model, which often prioritizes billable hours over client outcomes. Vitucci’s experience highlighted systemic issues, such as reliance on sampling methods and protracted timelines, R&D credit studies, for instance, can take traditional firms up to 270 days. Onshore’s platform counters this by leveraging AI to analyze data from integrated tools like ADP, Netsuite, QuickBooks, and Jira, delivering audit-grade results in an average of 2-3 weeks. This efficiency is bolstered by expert review, ensuring defensibility against IRS scrutiny. The company’s rebranding from SPRX to Onshore coincides with this funding, emphasizing a broader vision for “onshoring” tax processes through technology driven transparency and accountability.

The Series B builds on a solid funding trajectory. Onshore’s journey began with a $500,000 accelerator round in January 2023, widely attributed to Y Combinator’s backing, which provided not just capital but also strategic guidance in the early stages. This was followed by a $3 million Series A in April 2023, involving investors like Counterpart Ventures and Pruven Capital, aimed at product development and initial market penetration. An extension to the Series A in October 2024 further strengthened the company’s financial position, though specific amounts for that tranche remain undisclosed. The cumulative $46 million reflects a deliberate scaling strategy, with the latest round specifically allocated to expanding into adjacent U.S. tax and accounting domains. This includes automating workflows for corporate compliance and reporting, moving beyond core incentives like R&D credits, 179D deductions for energy efficient buildings, and cost segregation for accelerated depreciation.

Investor participation in the Series B highlights strategic alignments. FPV Ventures, known for backing AI innovators, praised Onshore for tackling “broken systems” with category defining potential. Wesley Chan, FPV’s co-founder and Managing Partner, noted the opportunity in an industry plagued by inefficiencies. ADP Ventures, the corporate venture arm of payroll giant ADP, brings domain expertise and potential synergies in data integration. Vertex Ventures, with a focus on enterprise software, and Restive Ventures add depth in scaling tech platforms. Y Combinator’s continued involvement underscores Onshore’s roots in the accelerator’s ecosystem, where it honed its AI first approach.

In the broader tax tech landscape, Onshore operates amid rising competition and market evolution. The sector has seen increased funding activity, with AI driven platforms like TaxBit (raised $130 million in 2021) and Avalara (acquired for $8.4 billion in 2022) demonstrating the scalability of automated compliance solutions. However, Onshore differentiates through its hybrid model, AI handles data processing, while in-house experts ensure regulatory robustness. This is particularly relevant as IRS audits intensify, with recent data showing a 20% uptick in examinations of large corporations. The company’s client base, spanning diverse industries, has already defended over $600 million in incentives, suggesting strong product market fit. Yet, challenges persist: scaling AI models requires vast datasets, and regulatory changes, such as updates to the Inflation Reduction Act’s energy incentives, could influence demand.

Financially, while post money valuation details are not public, the round’s size implies a healthy multiple on prior investments, potentially valuing Onshore in the $150-300 million range based on comparable tax tech deals (e.g., TaxJar’s $425 million acquisition by Stripe). This funding positions Onshore to invest in talent acquisition, technology enhancements, and market expansion. Plans include deepening integrations with enterprise systems and exploring new incentives tied to sustainability and innovation, aligning with federal priorities like the CHIPS Act and green energy credits.

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Looking ahead, Onshore’s trajectory could reshape tax services by democratizing access to incentives for mid market firms, which often lack resources for specialized advisors. If successful, it may inspire similar disruptions in adjacent fields like audit preparation or ESG reporting. However, risks include dependency on AI accuracy and potential pushback from established firms like Deloitte or PwC, which are also investing in AI. Overall, this Series B not only validates Onshore’s model but also highlights the transformative potential of AI in unlocking economic value through smarter tax strategies.