Cloud-based tax software company Avalara Inc. beat all expectations with its initial public offering Friday, raising $185 million as its share price jumped by 87 percent.

The company priced its shares at $24 after hiking the price from an initial range of $19 to $21. Shares then opened at $35 as trading began, before closing at $44.94 as trading ended Friday. Avalara said it sold 7.5 million shares in total on its first day of trading.

Seattle-based Avalara sells a cloud platform that businesses can use to create cost-effective tax solutions that integrate with their existing software to provide transparent transactions and accurate tax compliance. The company also offers compliance software related to sales tax and other transaction taxes, such a value-added tax.

The company’s platform provides hundreds of prebuilt connectors for leading accounting, enterprise resource planning, e-commerce and other business applications. It said it has assisted its customers in processing billions of tax transactions for customers and users, filed hundreds of thousands of tax compliance documents and tax returns, and managed millions of exemption certificates and other compliance-related documents.

Simon Geach, previously vice president of sales at Avalara Inc., appeared on SiliconANGLE’s mobile livestreaming studio theCUBE last year, where he explained how the growth of the subscription economy has benefited the company. He said subscriptions lead to an increased number of recurring transactions that are often not updated from their original agreements, which can create challenges for companies ensuring their product taxes are being accounted for and implemented properly.

“For a lot of companies, it becomes ever more complex,” Geach said. “And the costs of dealing with it manually can sneak up on you, and before you know it you’re investing a lot of time and resources managing it with no guarantee of accuracy.”

Avalara reckons the tax compliance landscape is further complicated by the growth of e-commerce and international trade, together with new taxation and reporting obligations on local, regional, state and national levels. As a result, the company said, there’s a big demand for the services it provides. “We estimate that the addressable market in the United States alone for the solutions we offer today is over $8 billion,” Avalara said in its IPO prospectus.

“Cloud is a great use case for tax because it’s a massive shared model where Avalara does the research once and basically everyone scales out with them,” said Ray “R” Wang, founder and principal analyst at Constellation Research Inc. “So instead of an independent software vendor trying to keep up with all the massive regulations from local to state to federal to international, all they have to do is use Avalara. This is what the cloud is all about.”

Avalara’s impressive first day on the stock market is therefore a great showcase for these kinds of compliance-as-a-service software offerings, Wang’s colleague Holger Mueller told SiliconANGLE. “Many enterprises struggle to stay on top of the regulatory tsunami, and vendors who can help take that complexity and liability away from them are well-being positioned going forward,” he said.

Avalara’s IPO was a long time coming. The company was founded way back in 2004, raising a total of $319.63 million in eight funding rounds along the way.

Avalara remains unprofitable, however. The company pulled in revenue of $61.3 million in the first quarter of this year, but posted a net loss of $15.2 million. For the whole of 2017, the company posted a net loss of $64 million.

Image: Avalara/Facebook