MasRefund, a Raleigh startup targeting Hispanic immigrants, is building up its coffers, one entrepreneurship contest at a time.
On Wednesday, the tax tech company walked away with the top prize of $5,000 at the IdeaFest Pitch Competition, part of a strong showing among North Carolina startups.
Social Cascade, also of Raleigh, took home second place and $3,000. Graham-based startup OsRostrum followed with third place and $2,000. Scale Materials of Virginia won the Dominion Energy Innovation Center prize worth $5,000. The competition is sponsored by the Launch Place of Danville, Virginia.
In an interview, Simon Karmarkar, who founded MasRefund in the midst of a pandemic, talks about the company's mission and what's next.
It’s the third venture for Karmarkar, a Google (Nasdaq: GOOG) veteran whose other startups include HelpMeNow, an early telehealth app connecting people to mental health services.
Karmarkar tried to retire after exiting his first two companies, albeit unsuccessfully.
“That lasted 21 days and my wife said, 'You’ve got to get out of the house,'” he said.
Karmarkar did just that, taking on a new leadership role with tax firm H&R Block in Texas, and it’s there that the entrepreneurial wheels started turning again. He saw Spanish speaking customers coming in, and not enough staff who spoke their language.
“I didn’t know how to help them,” he said. “They want to file taxes. They want to do the right thing.
As the idea circulated, he started taking coding classes. He realized most of the questions asked by tax preparers followed an easy formula, “If you’re single then this, if you’re married then this.”
So he wrote a rudimentary code, and it worked.
“I was like, okay, I’m onto something,” he said. In the midst of Covid shutdowns in 2020, he quit his day job at H&R and went all in on his idea, something he was able to do, he says, due to a supportive wife. The couple moved to Fuquay-Varina to be closer to their daughter.
And through the research he was doing for the startup that became MasRefund, he realized it wasn’t just about Spanish-speaking Americans. It was the immigrant story, something he could relate to as his father moved his family to the U.S. in the 1970s. His dad would pull tax forms from the library, tapping away at his Texas Instruments calculator.
“The biggest thing he was worried about was making a mistake on his taxes and all of us being deported,” he said.
Karmarkar conducted heavy market research, interviewing immigrants from all over, with many expressing some of those same fears. But there was another commonality that he said surprised him.
“After they submitted their tax returns, they felt like they were part of the American fabric,” he said.
The opportunity for a company like MasRefund was bigger than he had anticipated, he said.
“We have to democratize access to knowledge … that became my personal rallying call to develop this app,” he said.
Today, the firm has five people including Karmarkar. That includes three “ambassadors” in its markets.
“Our growth plan is to continue building that ambassador network,” he said.
Slowly but surely, he’s seeing his vision become a reality. Last season for coding simplicity’s sake, the firm targeted states without income tax like Texas, Florida and Nevada. 28 people used the platform. This season, that number increased to 222.
Growing requires capital, which is why Karmarkar is aggressively entering competitions such as IdeaFest. So far, he’s raised $60,000 from competitions alone. He’s secured outside investments from entities such as Hispanic-focused Loma Capital and the Triangle Tweener Fund. It adds up to about $550,000 to date. And he expects to raise a larger round later this year to get the company to the next level “now that we have traction.”