Avalara names Hugo Sarrazin as Chief Executive Officer

Avalara has appointed Hugo Sarrazin as chief executive officer, marking a leadership transition at the tax and compliance software group.

Scott McFarlane, the co-founder and original chief executive, will move into an advisory role. Sarrazin will also join the board.

Sarrazin takes charge of Avalara's global operations and strategy as the business expands its use of artificial intelligence across tax and compliance products. The change is intended to maintain continuity while placing greater emphasis on execution and innovation.

He joins after senior roles at Udemy and UKG, following a long career at McKinsey & Company. Most recently, he was president and chief executive officer of Udemy, where he led the company through its sale to Coursera.

Before that, Sarrazin served as president and chief product and technology officer at UKG, where he worked on cloud transformation, AI-related products and acquisitions. Earlier in his career, he spent 26 years at McKinsey and co-founded McKinsey Digital Labs.

McFarlane founded Avalara in 2004 and led it from a startup on Bainbridge Island, Washington, into a large tax and compliance software provider. During his tenure, the business completed an initial public offering in 2018 and grew to more than USD $1.3 billion in annual revenue, with more than 1,400 integrations and more than 1 million business customers worldwide.

AI focus

Avalara has been increasing its focus on AI tools for tax calculation, return filing and exemption certificate management. Its platform processes more than 54 billion transactions a year and draws on a large body of tax content, regulatory coverage and software integrations.

The company has also been developing products including Agentic Tax and Compliance and an Avalara large language model framework aimed at embedding AI into compliance workflows. Those tools are designed to automate tasks across the compliance process and support more consistent real-time results.

The leadership change comes as software groups serving finance and back-office functions compete to show that AI can reduce manual work in highly regulated areas. Tax compliance is one of the most data-intensive parts of enterprise administration, particularly for companies operating across multiple jurisdictions.

Avalara has built its position in that market around cloud-based tax automation and a broad network of links into eCommerce, enterprise resource planning and financial systems. Those links, along with its tax data, are central to how it trains and deploys AI tools for compliance tasks.

"I'm excited to join the leader for tax and compliance that leverages proprietary data and deep domain expertise to deliver intelligent, dynamic solutions for customers worldwide," said Sarrazin, chief executive officer of Avalara.

"Avalara is helping define how AI agents can automate and simplify compliance at global scale and already has a leading AI-powered platform and market presence that few companies can replicate. The opportunity now is to accelerate innovation even further, turning that advantage into more seamless outcomes for customers and partners globally," he said.

McFarlane said the business is entering a new stage after more than two decades under its founding leadership. The handover leaves him in an advisory position rather than marking a full exit from the company.

"Avalara is stronger today than at any point in our history," said McFarlane, advisor to Avalara.

"We've built a category leader with real scale and a platform that's becoming more critical as tax and compliance grow more complex. The next chapter is about moving faster and delivering more for our customers and partners. Hugo brings the operational and technology leadership needed to accelerate what comes next," he said.