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How 27-year-old Nick Simpson built the freelancing tax tool he wished he had and then raised $7.5 million in venture funding

Madeline Renbarger   

How 27-year-old Nick Simpson built the freelancing tax tool he wished he had and then raised $7.5 million in venture funding
  • WorkMade is a new startup that lets freelancers keep track of their earnings and pay taxes.
  • Frequent freelancer Nick Simpson founded WorkMade in 2022 and scaled the startup to 12 employees.

Nick Simpson has been freelancing for a while.

The 27-year-old founder of WorkMade landed his first for hire gig when he was just 9-years-old. He helped his neighbors, who were spa consultants at the time, build and design websites. "I was a nerd who would steal their Wi-Fi from the fence in the backyard," he said. "They asked me if I made websites one day and I said yes."

He turned those early gigs into a lucrative career as a designer for consumer-packaged-brands like the hydration supplement Hydrant and the skincare scrub brand Becky, which he also founded..

But throughout his working life, paying taxes on his freelance earnings has always been a huge hassle. Freelancers have to withhold taxes themselves when filing a 1099 form in the US, and payment schedules can vary from state to state.

One year, Simpson got a shocking notice that he owed $140,000 in taxes, but when he went to pay the bill, there was nowhere on the IRS website where he could do so, he said. "That was the moment that I realized we were going to have a massive global tax issue, as the number of freelancers is only going to grow," he told Insider.

That stressful incident was the catalyst for Simpson to found WorkMade, a startup that lets freelancers manage, withhold, and pay taxes on their business income all in one app. Founded in 2022, Simpson has grown the company to 12 employees and is launching the product to the public this month, after accruing a waitlist of over 30,000 sign ups.

The startup has also raised $7.5 million in venture capital funding to date, with top seed investors like Anna Barber's M13, 1517 Fund, Gale Wilkinson's Vitalize Venture Capital, and Slack.

WorkMade offers business banking services for freelancers, supplied by Piermont Bank that includes a Mastercard debit card. When a customer signs up on the app, they're first prompted with a series of straightforward questions about how they typically file taxes, like whether they are single or married, filing jointly or separately, or use a vehicle for work, Simpson explained.

Next, users can then link bank accounts to indicate which expenses are personal and professional, and WorkMade automates the rest of the tax management process using AI, such as tracking tax write-offs, calculating taxes owed each quarter and putting aside the correct amount from their earnings for taxes.

When it comes time for a freelancer to pay their taxes, WorkMade manages that process too, including the payment without any forms, mail or extra calculations.

There are many other startup tools for freelancers to manage their gigs like Madrid's freelance work marketplace Jobsandtalent or Wellington, New Zealand's Hnry. But WorkMade differentiates itself by focusing solely on solving the problems around managing tax payments for US customers, Simpson explained.

And the market for tools for freelancers in the US is a rapidly growing one. According to Statista, there are an estimated 73 million freelancers working in the US this year, and that number is projected to grow to over 90 million by 2028.

Simpson plans to use this infusion of capital to continue to build new features for freelancers and acquire even more customers through future partnerships and word of mouth recommendations.

"If somebody would have told me I'd be doing anything in taxes, banking and fintech, I would have laughed at them," Simpson said, "but I feel like it's just added up to what I've been doing for nearly the past two decades."

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