A Columbus fintech that spun out of an accounting firm 10 years ago is bringing accountants back aboard with the acquisition of two Ohio firms.
Arvo Tech automates the data collection and filing for dozens of employment-related tax credits for some 350 largely blue-collar small and mid-size businesses.
With some credits set to expire next year and a looming election likely to bring more tax code changes, the company wanted to offer more comprehensive tax services.
Full-service accounting firms Mark Murphy and Associates and Lee and Associates are joining Arvo, the company announced Tuesday. Their services will integrate into the digital platform.
“By adding best-in-breed accounting support ... we are expanding our capabilities to ensure we’re delivering everything companies need to maximize their financial decisions and cash flow," co-founder and President President Terracina Maxwell said in a release.
"We continue to seek partnerships with technology and service providers who share our mission of helping small businesses succeed.”
Terms were not disclosed. It's basically an "acqui-hire" – all 16 employees from the two CPA offices join the 41-person Arvo, according to a statement. Expansion is planned.
Mark Murphy founded his firm with six accountants and tax planners 20 years ago, based in Columbus near Upper Arlington. Terry Lee is founder of his three-CPA firm, based in St. Clairsville, due east of Columbus near the West Virginia line.
The firms bring clients that extend Arvo's reach to new industries, including restaurants and bars, retail, and manufacturing, according to the release.
Over the past year, Arvo has increased its distribution through partnerships with payroll and hiring technology such as Gusto, Bullhorn and TempWorks.
Founded in early 2014, Arvo raised $3 million from outside investors when it started but has bootstrapped since then. Revenue is not disclosed, but is based on a percentage of the more than $650 million in tax credits clients have collected to date.
Named Clarus Solutions LLC until last spring, Arvo is one of two software companies spun out of former accounting firm Clarus Partners, which was itself acquired by the firm Blue & Co.
The other spinout, Clarus R&D Solutions LLC, was acquired in 2022 by publicly traded TriNet Group Inc. for $48 million, according to the California company's annual report. The two spinouts both automate arduous tax credit filings, but for different target markets.
Arvo is based at 1500 Lake Shore Dr. off Dublin Road.
One of the largest credits it helps apply for is the Work Opportunity Credit, created to help get people receiving public assistance into jobs. Once targeted to larger employers, rule changes made it more accessible to smaller businesses, but it was a largely manual process before Arvo.
The IRS form for each Work Opportunity hire notes that record-keeping can take 6 1/2 hours.
Created in 2020, the Employee Retention Credit is related to pandemic-related drops in revenue in 2020 and '21, and there are rolling deadlines through January 2025 to file amended returns to claim the credit.
Arvo has expanded its tech to cover more state and local credits and with the acquisitions can offer CPAs for full tax planning.
