Andrew Irwin: Hello, I’m Andrew Irwin, counsel in Osler’s Emerging High Growth Companies Practice Group. Today I’m pleased to welcome Benjamin Alarie, co-founder and CEO of Blue J, building the AI-powered operating layer for global tax cognition. He’s also the Osler Chair in Business Law at the University of Toronto and co-author of The Legal Singularity and the recently released Super Justice.
All right, so Ben, Blue J recently announced a significant 122-million-dollar U.S. series D financing round with participation from both new and returning investors.
What do you believe this level of investment signal about the market’s confidence in AI-driven solutions for the accounting and tax sector, and how do you plan to deploy this capital to further Blue J’s mission?
Benjamin Alarie: Great question Andrew. I think it’s all about recognizing that tax and accounting is a huge and, I think, underserved category within AI so far. The fact is that the global professional services market for tax specifically is in the hundreds of billions of dollars, and it’s an area where there’s been underinvestment, I would argue, for the past several decades. We have really clear proof of product-market fit. So, for example, our net revenue retention was more than 200% last year. Our gross revenue retention is over 95%. Our net promoter score is in the low eighties on our platform. And, so when you combine a large addressable market with really significant customer love, investors pay attention.
As for what we’re going to do with the capital, I mean, we’ve been busy in three areas. One is scaling up product and engineering. So we’ve basically doubled the team since we closed the round to accelerate the platform capabilities of Blue J around international tax and accounting standards. On the go-to-market front, we’ve built out sales, customer success and, just last week, we launched a product-led growth motion that lets tax people try Blue J before their firm commits more broadly, which is really exciting, and I’m super excited to see how this plays out. Then we’ve also really invested a ton of energy and resources into content partnerships, where we’re licensing authoritative content from the leading nonprofit publishers globally, including Tax Notes, IBFD, and others, across jurisdictions. And so we’ve been really disciplined about our use of proceeds. We’re near break even, and we have really strong cash reserves; so we’re building for durability and speed at the same time. And the market uptake has been amazing.
The press release when we announced the Series D referenced that, you know, we doubled in the first half of 2025. We doubled again in the second half of 2025 and, already as we move into to 2026, we’re running significantly ahead of plan this year. So I’m really excited.
Andrew Irwin: That’s great, and you’ve been working hard, obviously.
What factors do you attribute to the acceleration of the business, and what are you hearing from tax and accounting professionals about why they’re adopting generative AI tools now rather than taking a wait-and-see approach?
Benjami Alarie: I think, you know, ChatGPT launched at the end of November
in 2022. It’s now been more than three years. It’s, you know, we’re coming up on three and a half years of having ChatGPT and really credible large language models available for widespread, you know, use in the market. I think we’ve moved from the time when folks were trying these kinds of tools out to now we’re seeing folks really relying on tools like Blue J to power their tax practices.
It’s remarkable the exponential curve we’ve been following with usage on our platform. I think 2026 is going to be our first, million-answer, month at Blue J. We recently crossed the six million tax research questions asked on the platform. We’ll add a seven millionth tax research answer this month in March. And basically year over year usage is growing, you know, between four times and five times month over month. And so this kind of exponential really does show people are moving from trying to rely on the technology, and I think the underlying reason is it’s just really, really good. So it’s really good at delivering accurate tax answers. It’s not perfect yet, working on improving it every day, and there are a few different ingredients going into it.
Of course, the frontier, the foundational models continue to improve. And so we’ve got, you know, OpenAI working away. We’ve got Anthropic working away on Claude. We’ve got Google working away on Gemini, and we’re constantly testing all the different frontier models, using them for different parts of Blue J’s capabilities. So we’re getting a natural boost from the improvement in the models generally. But then we’re also improving the content that’s driving the system, to even better, more authoritative answers, and analyses to base the answers on. And then finally, we’re learning from all of this use that we’re seeing in the platform. So when people give feedback in Blue J, and about point one percent of the answers Blue J is delivering is leading to folks suggesting the answer isn’t correct. They disagree with the answer for some reason. So, 99.9% of the time, people are not disagreeing with Blue J’s answers, 0.1% of the time they are. And we’re mining that feedback to improve the product even further. And so we’re on this really exciting product improvement flywheel, and we’re starting to move into, you know, the significant meat of the market where really big enterprise players are coming in. We now serve three of the big four accounting firms, globally, which is really exciting. We’ve seen government adoption of Blue J at this point, and so it’s becoming really credible. We’re getting to the point where these tools are so good and so effective that nobody can afford to ignore them anymore.
Andrew Irwin: Yeah. It’s definitely an exciting time in the industry and kind of the world generally, how AI is really taking over.
Benjamin Alarie: Absolutely.
Andrew Irwin: Pivoting back to the financing transaction. So the round was co-led by two growth equity firms who both made significant investments. Introducing new investors can significantly change the governance dynamics of a company.
Can you share how you selected those two lead investors and your experience working with them since closing?
Benjamin Alarie: Sure. Heading into the round, it was my intention to really find those firms that understood Blue J’s business and could be really supportive for us as we scaled up the business, as much as we possibly could rely on them. And this is something we did in consultation with counsel at Osler. So thank you, Andrew, and thanks to your colleagues forr helping me sharpen my thinking about how to approach this. Basically, you know, we had a sense of what a defensible market value would be for Blue J at the time, given how the business was progressing and our strengths, and what we, what we foresaw, in the immediate term. We kind of set quite reasonable expectations t what the deal terms should be. And then I had a number of conversations with firms, and I went shopping for the firms that would be, you know, the best fit for Blue J, and had the best understanding of our business. And we settled on Sapphire, which is, of course, one of the top growth equity investors, where their critical mass is in California and Austin, Texas. And then also Oak HCFT, their critical mass is in Connecticut and New York, so kind of an East Coast and a West Coast investor. What drew me to those firms in particular were the individual partners who’d be joining the Blue J board. So Kathy Yao at Sapphire and Alan Miller at Oak HCFT, both fantastic people, different strengths for each of them. And each of their firms bring a supportive bench of functional support that can help Blue J.
And what I really liked about the idea of bringing on co-leads for the round is the two firms have different uncorrelated strengths. So East Coast, West Coast, you know, maybe you know, this is a stereotype, but the East Coast is going to be more like, fintech and more conservative, by nature, given the New York milieu. And then a West Coast investor is going be a little bit more aggressive, bring some more of that Bay Area energy to helping out Blue J. And it’s been so fantastic. They’ve more than delivered on what I expected them to be able to help us with. And they both have fantastic teams.
We’ve been adding a lot of talent to the team. So we recruited a president for the go-to-market, that’s Tina Goldborn. She joined us in September and she’s been fantastic. And we just hired a new CFO, Grant Hughes, who joined us, this past week actually. And in both of those searches, the the talent teams from both Sapphire and Oak have been quite helpful in finding the candidates for our shortlist, and doing a final vetting of the candidates. So on the talent side, it’s been fantastic. On the product side, it’s also been very helpful to get their feedback and to talk through the longer-term way in which we’re making Blue J into an essential platform for tax professionals. So I couldn’t be happier with how things have gone. A lot of it was approaching it with the right mindset and understanding the market, and that’s where Osler has been super helpful to me personally, and to Blue J in getting that right.
Andrew Irwin: That’s great. It’s such a partnership when you take on new lead investors, and really glad to hear that you’re having such a great experience. It’s so much beyond just the financial investment that these investors offer. It’s also, as kind of a side point, a great example of U.S. investors finding good, high-quality Canadian companies to invest in. There’s been a lot of
discussion over the last few months about, you know, whether U.S. investors are willing to invest in Canadian companies. And so this is a great example of what we see in the market that, you know, there really isn’t a material barrier to taking on U.S. investment. Pivoting back to kind of the general market and AI, so as a pioneer in applying generative AI to tax research and analysis, you have a unique vantage point on how this technology is reshaping professional services.
Looking ahead, how do you see the relationship between AI tools like Blue J and tax professionals evolving, and what new capabilities or applications are you most excited about bringing to market?
Benjamin Alarie: Well, let’s start with how laborious and painful tax research is just generally, Andrew. So everybody, all kinds of tax professionals, whether you’re talking about accountants or tax lawyers, if you’re talking about, you know, folks in government, so tax auditors, or others working for the Canada Revenue Agency or the IRS or in the UK, HMRC, everybody struggles with just how complex and deep tax law is, and it’s extremely difficult to get to a confident answer in a lot of areas of tax. And so, it’s just super painful. And I say this as somebody who has been a a tax law professor for the last 20+ years at the University of Toronto. I’ve literally spent thousands of hours of my own life doing tax research; so I’m really familiar with that pain. What’s amazing is you can now leverage Blue J. You can ask essentially any tax research question in a direct kind of human, plain language sort of way of Blue J, and Blue J is going to give an extremely good answer by very, very quickly, working through millions of pages of tax law. And so it includes the statute, regulations, administrative rulings, it includes all the case law, a lot of professional news and commentary, and we’ve licensed. And Blue J will scan all of those materials, find the most germane materials, synthesize all of it, and produce a very direct, plain language, often extremely well-reasoned answer to your tax research question. And it flips the entire tax research exercise on its head.
In the past, you might have done a Google search and, or even like a Boolean search within one of the traditional tax research platforms, and you’d get a list of really authoritative documents to sift through, and lots of links to click on and then materials to read. And you yourself would be doing the work that Blue J now does in essentially reading and understand at a conceptual level all of those materials and then generating a response. So, I think ultimately this isn’t going to be something that’s a problem for tax professionals. I think the effect is going to be very similar to what we saw with spreadsheets and accounting. Andrew, you’re too young to remember these days, and, to some extent I am too, so this is based on hearsay. But I seem to recall people older than us, talking about like in the late seventies, early eighties, when VisiCalc and Lotus 1-2-3 and, you know, spreadsheets first came out, oh, now this’ll be the end of accounting because everybody will be able to very quickly do all of the work that bookkeepers and accountants have been doing with respect to numbers. But that’s not at all how the world has played out, as you know. We now have more accountants than we’ve ever had. Spreadsheets saved a lot of the really tedious work from taking up accountants’ time and bookkeepers’ time. But we now have more of each and, you know, we leave the professionals to exercise their judgment, and they can move much more quickly over all of the tax law materials, and end up producing the strategic advice to service their clients and actually ultimately unlock more value for their clients. And so my prediction is, within the next few years, it will become, I would say, unthinkable to practice tax without an AI research layer, informing the analysis. It’d be like trying to do accounting without a spreadsheet. It’d be like you could still do it, but nobody would choose to do it — just wouldn’t make any sense.
Andrew Irwin: Absolutely. I think that’ll be true across many different verticals of professional services as well. So it’ll be interesting to see how, you know, AI continues to proliferate through those industries.
Thank you very much, Ben. This was really insightful. I think it’s going to be really interesting. You have a great perspective over what it’s like to do a material financing transaction like this, to build a successful business, and really appreciate your time and feedback here.
Benjamin Alarie: Thanks, Andrew. I’d be remiss not to close with some more words of praise about Osler’s role in Blue J’s journey. Back in 2015, Jeff Tabor actually worked with me to initially incorporate Blue J, effective April 21, 2015. I can’t forget that day. It’s on the original, incorporation documents. And so from that time, and of course, Jeff, passed away, sadly. But then we landed on the desk of Chad Bayne, and Chad’s been an incredible resource for Blue J, after Jeff essentially handed the baton to Chad. And now Chad, of course, has introduced us to you, and you’ve been a phenomenal resource for Blue J as we’ve been navigating the last few years through our Series C financing, our Series D financing, some strategic divestitures. All these complex commercial things that we’ve been doing have been done hand in glove with the Osler team. So, it’s been really fantastic, and I love the fact that I also hold the Osler Chair in Business Law at the University of Toronto. It just kind of feels like this is a match made in heaven here. So thanks. Thanks, Andrew. Thanks for having me on.
Andrew Irwin: Thanks for this conversation and the opportunity to talk a little bit about what Osler has meant to Blue J. I really appreciate it. Absolutely. Thanks for the nice words and really enjoy working with you.
