The taxman got a lot smarter
The single most important fact behind Auckland start-up Nylon’s rise has nothing to do with Nylon. It is what is happening on the other side of the ledger. Inland Revenue’s AI-powered enforcement has sharpened dramatically. In the first half of the 2024 financial year IRD opened 3,600 audits, 50% more than the same period a year earlier, screening more than 3 million returns and flagging 30,000 for review. The property sector alone gave up $150 million in undeclared income tax and GST.
The full-year numbers are starker. IRD’s compliance investment delivered $1.4 billion in revenue against a $1.038 billion target, a return of $11.81 for every dollar spent, with $4.3 billion clawed back from overdue debt. And the targets keep climbing. IRD’s Budget data sets the minimum intervention revenue target at $1,228.1 million for 2025-26, rising to $1,334.1 million the year after.
When the tax authority gets better at finding problems, the cost of being wrong goes up, and so does the value of any tool that helps advisers get it right. That is the market Nylon is selling into.
The former EY lawyer who saw the gap
Nylon was founded in early 2024 by Andrew Wierda, then 24 and a tax lawyer at EY. His observation was blunt: “even the largest corporations in the whole world couldn’t afford all the tax advice that they needed on all their transactions.” He pulled in a lead software engineer from Atlassian and an Otago computer science graduate, built the product as a side hustle under the name Law Cyborg, then quit once the sales came.
The technical differentiator is the discipline of the thing. Rather than roaming the open web like ChatGPT or Claude, Nylon restricts its AI agents to trusted authoritative sources – legislation, case law, government databases and tax authority guidance. It now runs 1,800 paying customers and 27 staff across Auckland and London, having expanded from tax into employment law.
The backers know what good advice looks like
What makes the raise credible is who wrote the cheques. The seed round of $2.5 million was led by Blackbird, the Australasian VC firm behind Canva and Rokt. The earlier angel round drew a roll call of domain heavyweights: longtime PwC senior partner Geoff Nightingale, barrister Michael Heron KC, M-Com founder Adam Clark, Warehouse founder Sir Stephen Tindall and tech investor Serge van Dam.
Nightingale, now a director, was a customer first. This is not passive capital. It is people who validated the product by using it in the exact work it is meant to do. Nylon is now targeting a $20 million raise to fund a UK and US push.
Priced for the mid-market
The pricing tells you the target. Nylon charges $39, $99 or $199 per user per month depending on features, with custom deals for the biggest clients. Existing customers include mid-tier multinationals UHY, William Buck and RSM. Its AI notetaker product, Wierda says, is “like having a sharp junior in every meeting who never misses a detail.”
The underlying demand is real. IRD’s own 2024 survey of 5,348 small businesses found the median hourly value of in-house tax compliance time rose from $74.89 to $88.88 between 2021 and 2024. And the profession is moving fast. NBR’s April 2026 analysis cites CPA Australia data showing 89% of Asia-Pacific organisations now use AI in some form, with 68% of tax and accounting professionals excited or hopeful about generative AI.
The question the next raise has to answer
There is one honest edge to this story. Restricting the AI to authoritative sources reduces the risk of confident nonsense, but it does not settle liability. Who is responsible when a firm relies on AI-assisted research that turns out to be wrong? The professional indemnity framework for AI-assisted advice has not caught up, and institutional buyers writing large cheques will want that answered before they scale up. It is not a reason to dismiss Nylon. It is the question its $20 million round will need to close.
Nylon fits a familiar pattern of Kiwi tech going global, following Hnry’s automated tax handling for contractors offshore. But it is aiming a rung higher, at interpretive advisory work rather than routine filing, starting in the common-law-friendly UK before the far larger US prize. If it lands, it will have proved that compliance is no longer a services business alone. It is becoming a software market, and IRD’s own sharpening AI is doing half the selling.
Sources
- Tax law AI start-up Nylon raises millions from industry veterans, targets $20m for UK and US push (2026-08-05)
- How AI is changing Inland Revenue tax collection (2025-06-19)
- Government investment pays off: Inland Revenue achieves $11.81 ROI on compliance (2025)
- Budget 2024, 2025 and 2026: investment in compliance activities (2026-07-07)
- 2024 study on the time and cost of doing business taxes incurred by NZ small businesses (2024-09)
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