BlackRock’s Private Financing Solutions announced on November 12, 2025 that it will invest $500 million in Avalara, a leading cloud‑based tax‑compliance technology provider. The investment closed the day before, on November 11, 2025, and will be structured as convertible preferred stock, giving BlackRock a stake that can be converted into common equity under defined terms.
Avalara has delivered strong revenue growth in recent years, reporting $208.6 million in revenue for Q2 2022—up 23% year‑over‑year—and $181.2 million for Q3 2021, a 42% increase. The company’s high gross margin of 70% reflects its software‑as‑a‑service model and the scalability of its platform, which serves more than 43,000 businesses worldwide.
BlackRock’s move aligns with its broader strategy to deepen its presence in private markets through the Private Financing Solutions (PFS) platform, which was created after the acquisition of HPS Investment Partners. PFS manages $190 billion in client assets and focuses on private credit, GP/LP solutions, and CLO businesses, positioning BlackRock to capture higher fee income and diversify its revenue streams.
The deal structure—convertible preferred stock—provides Avalara with capital to accelerate product development and market expansion while preserving its existing equity structure. The investment also signals confidence in Avalara’s “agentic AI” capabilities, which automate complex tax and compliance processes and are expected to drive future revenue growth.
Vista Equity Partners, which invested in Avalara in 2022 and remains the majority shareholder, has welcomed BlackRock as a co‑investor. The partnership underscores Vista’s strategy of supporting high‑growth software companies and provides Avalara with additional capital and strategic guidance.
Scott McFarlane, CEO and co‑founder of Avalara, said, “We’re proud to welcome BlackRock as an investor as we work to advance our position as a trusted provider of innovative tax and compliance software.” Laurence D. Fink, Chairman and CEO of BlackRock, noted, “Clients around the world are coming to BlackRock for deeper, more dynamic partnerships across public and private asset classes. This investment is a clear example of how we are investing ahead of client needs and supporting growth in high‑potential sectors.”
The transaction highlights the rapid growth of the global tax‑technology market, projected to rise from $18.53 billion in 2024 to $36.72 billion by 2030. By investing in Avalara, BlackRock not only gains exposure to a high‑margin software business but also positions itself to benefit from the increasing regulatory complexity and demand for automated compliance solutions across industries.
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