Edison Partners on Thursday said it led a $20 million growth investment in K1x, a Nashville-based Software-as-a-Service financial technology company and pioneer of all-digital K-1 data aggregation and reporting for the capital markets.
K-1 is a federal tax document used to report the income, losses and dividends for a business’s or financial entity’s partners or an S-corporation’s shareholders. The K-1 form is also used to report income distributions from trusts and estates to beneficiaries. Historically, investors and their advisers have used time-consuming analog technology, prone to inaccuracies, late information and hidden costs.
Using proprietary, patented artificial intelligence, K1x has built and evolved best-in-class software that has brought digital transformation to K-1 reporting, which connects institutional investors and their advisers to seamlessly and efficiently exchange alternative investment data. The technology has drawn interest from especially financial firms’ chief financial officers seeking to leverage AI and new technology to reduce costs and risks.
Edison is doubling down on K1x, making an additional investment to accelerate its momentum in modernizing K-1 reporting and data management.
According to Edison Partners, K1x’s growth has been on a continuous, upward trajectory. Over the last year, the K1x team increased the number of product releases, driving a 90% increase in K1x product users.
“Partnering with K1x has been an absolute pleasure. Ever since the spinout and our initial investment less than two years ago, we have built a well-oiled enterprise SaaS machine that is capitalizing on multiple tailwinds. Their products are unique, patented, end-to-end, and fine-tuned over several years to become the first Digital K-1 experience,” Jennifer Lee, partner, Edison Partners, said. “With ongoing changes to the tax laws and compliance, continued expansion in alternative investing, countless organizations that still need to digitize and the prowess of K1x’s management team, we are thrilled to be doubling down on our investment and continue our support.”
K1x customers include 16 of the Top 25 accounting firms and 44 of the Top 100 institutional investors. The latest financing brings the company’s total funding to $40 million and will be used for product innovation and expansion, as well as serving existing and future clients with industry leading market facing talent.
Since Edison’s initial investment in December 2022, the company has seen 130%-plus revenue growth in an estimated $3.3 billion total addressable market.
