Intuit Acquires Tax Planning Startup GoodApril Before Techstars Demo
GoodApril, we hardly knew you.
The founders of the Techstars startup announced Thursday that Intuit has bought their company for an undisclosed price. GoodApril makes tax-planning software intended to help users reduce their annual tax bill, so the company seems like a logical fit with Intuit (NASDAQ: INTU), which makes the TurboTax tax preparation and filing program.
The deal closed Tuesday, according to co-founder and chief operating officer Mitchell Fox. He said the two companies have been negotiating the acquisition for several weeks.
That’s pretty impressive, as the deal closed two days before GoodApril and the rest of the Techstars Boulder startups were to take the stage for Demo Day, the investor showcase that is Techstars’ capstone event.
Like the other startups, GoodApril was practicing its pitch and making preparations for a seed investment round, Fox said. But about halfway through the program it began negotiating with Intuit and relying on Techstars mentors for advice about getting the right value for the company and the technicalities of the contract.
“They helped us make sure it was a deal we were very happy with,” Fox said.
GoodApril’s exit before the end of Techstars appears to be a first, according to Fox.
GoodApril CEO Benny Joseph gave an abbreviated version of GoodApril’s now somewhat redundant investor pitch at Demo Day. From that presentation and prior interviews with Joseph and Fox, it was clear why Intuit would be so interested in GoodApril.
Anyone who has used TurboTax or H&R Block’s similar program knows they go into a lot of detail about possible deductions, but it is all retrospective to the prior tax year. The programs can give you a sense of what you could have done to lower your tax bill, but by then it’s too late to make any changes, and you can only hope that knowledge is applicable for the upcoming year.
GoodApril’s focus was on tax planning and tax minimization strategies. Customers could link GoodApril to their various bank accounts and use the program throughout the year, and GoodApril would identify steps they could take in advance to become eligible for deductions and to lower their bills come April 15.
Joseph said at best it could “bring tax planning to the 99 percent,” and at a minimum it would help users know how much to withhold from a paycheck and eliminate surprises, Joseph said.
“People go into tax filings blind,” he said.
Joseph estimated about $22 billion worth of valid tax deductions go unclaimed each year.
Two of the target markets for GoodApril were the self-employed and freelancers, Fox said. Part of the pitch to freelancers was that it could help them with the quarterly tax filings the IRS requires.
Fox said GoodApril’s plan was to eventually integrate tax preparation and filing capabilities similar to TurboTax into GoodApril as the company built out its platform, but that’s now unnecessary.
Fox, 30, and Joseph, 33, began working on GoodApril in January and had a product worked up by March. They live in the San Francisco area, and at various events had met people from Intuit who seemed interested in their startup.
They assumed any serious interest on Intuit’s part would be well off in the future and went into Techstars thinking they would be spending the next few years getting GoodApril up and running.
“We saw Techstars as being a valuable way for us to rapidly learn how to be better entrepreneurs and get credibility with investors,” Fox said.
A few weeks after starting Techstars, Intuit approached them asking to talk. Fox said it was unexpected, and GoodApril tried to do all the work necessary for a successful launch in case the deal with Intuit fell through.
“We were in a good position to be able to fundraise out of Techstars,” Fox said. “This came as a surprise.”
The future of the GoodApril brand and what Fox and Joseph will be doing at Intuit is yet to be determined, Fox said. The only thing that’s clear is that they’re expected to be on the job Monday.
“We were hoping for a break,” Fox said.