To help stimulate the world’s economies and new trade rules between the UK and the rest of the world in the post-Brexit scenario, regulations have been evolving rapidly. Adding on to Brexit, new EU trade rules have also been introduced from 1 July this year. These two developments have completely changed the way goods move in and out of Europe.
The new regulations have increased the number of customs declarations by more than 900% as billions of new declarations must be submitted and processed. All goods entering the EU must be declared in customs and all orders will now be subject to VAT. EU nations are strongly motivated to enforce the new rules as they are expected to result in over €10 billion in additional tax revenues for member states.
This, however, will lead to challenging times for the e-commerce and logistics companies as they face tedious amounts of paperwork and returned goods from dissatisfied customers.
Betting big on this untapped segment is Estonia-based Eurora. Taking care of worldwide customs’ regulations for global e-commerce players, this startup is using AI and machine language (ML) to automatically manage cross-border VAT, duty amounts and declarations.
Offering compliance solutions
The company has now announced it has closed a $3 million seed investment round to expand coverage of its e-commerce suite of customs compliance tools across 193 countries. Its powerful AI and ML engine dynamically assigns to e-commerce product transactions an appropriate HS code (standardized numerical method of classifying products), calculates the appropriate VAT and duty amounts, and automatically creates electronic declarations for EU duties and taxes. The company can also act as the fiscal representative for all cross-border transactions for non-EU sellers shipping products to EU customers.
This investment round was led by Change Ventures which was joined by top angels including the founders of Printify, Artis Kehris and Janis Berdigans, and founder of KatanaMRP, Kristjan Vilosius. To date, Eurora Solutions has raised over €10 million in investments and research grants. The company’s early investors include industry insiders like Roger Crook (former CEO, DHL Global Forwarding) and Taavi Kotka (former CIO for the Government of Estonia).
Utilising cross-border logistics tools
The company’s focus is currently on Chinese platforms which represent over half of the world’s e-commerce volume. It has already on-boarded major clients like UBI and TopYou (largest e-commerce logistics providers in South China), Yanwen (ranked in the top three cross-border e-commerce logistics providers in China), JD.com (one of the largest marketplaces in the World), and AIECOMS (large Association of Chinese cross-border e-commerce businesses). Together they represent over one million Chinese e-commerce companies.
Managing e-commerce transactions
The company is already processing over 100,000 e-commerce transactions per day, and volume is expected to increase to over one million transactions per day by the end of 2021. Eurora’s founders, with more than 30 years of experience in logistics, in partnership with several universities, have built a cutting-edge platform that modernises and automates these bureaucratic processes. The AI/ML engine has been trained on over 500 million product descriptions, allowing the AI to automatically handle 5000 requests per second with up to 96% accuracy. This is the highest level of accuracy, speed and automation available on the market.