Inside the wild fall and last-minute revival of Bench, the venture capital-backed accounting startup that collapsed over the holidays
Friday, December 27 was supposed to be the start of a relaxing weekend.
But it’s been chaos for thousands of small business owners who use Bench, a Canadian-based accounting and tax startup that has raised $113 million from investors like Bain Capital Ventures and Shopify.
That morning, they found themselves unable to log into their accounts as tax season began. The entire Bench website was offline except for a notice that Bench was closing after 13 years of operation.
Hundreds of Bench employees found themselves laid off immediately without any separation or notice, several former employees told TechCrunch. Emails TechCrunch sent to employees that day bounced back.
The move was so surprising that one customer, who had kept years of data on Bench’s website and even appeared on its front page before it went offline, only learned of the shutdown when Contact him TechCrunch To react.
“I wasn’t aware of that,” said Justin Mitros, co-founder of Radiator. “I’ve never seen anyone shut down like that. It’s crazy.”
Struggling Bench Automation
Bench has billed itself as a bookkeeping and tax startup, and has an intuitive platform that any small or medium-sized business can use. It claimed over 12,000 customers by the time it closed.
One reason the company is struggling is the trend toward adopting artificial intelligence and other automation tools in recent years, according to some employees.
It turns out that automating accounting tasks, like categorizing expenses, is easier in theory than in practice, former employees told TechCrunch. One former employee claimed that the only way Bench could scale was with artificial intelligence, but its implementation was flawed and the tools it created did not work properly. Overreliance on these tools, sometimes at the expense of human accountants, led to delays, as books were passed between different teams rather than staying with one employee.
These delays caused some customers to quit. One former employee told TechCrunch that some clients were still waiting for their 2023 books in September 2024, after the key tax deadlines.
According to former employees, Bench went through multiple rounds of layoffs starting in late 2022. By the end of 2024, fewer than 400 people said they worked at Bench on LinkedIn, compared to about 700 in January 2023.
Stir on top
Implementation problems were exacerbated by turmoil in the Bench’s executive suite. Bench’s first CEO, co-founder Ian Crosby, left in 2021 just months after Bench raised a $60 million Series C round. Crosby accused unnamed board members of forcing him to resign and be replaced by a “professional CEO” after he disagreed with strategic decisions.
“I hope the Bench story goes on to become a warning to venture capitalists who think they can ‘upgrade’ a company by replacing the founder. It never works,” Crosby wrote in a Share LinkedIn After the sudden closure.
Bench’s second CEO was Jean-Philippe Dureus, who previously served as CFO. He focused on making the company profitable, according to former employees. In theory, automation could make Bench rely less on costly human labor to serve its many customers. But the gambit didn’t work amid implementation issues, customer decline, and declining investor interest in non-AI-related companies.
Bench switched CEOs again in November 2024, bringing on Adam Schlesinger, an executive-in-residence at venture capital firm Inovia Capital, one of Bench’s investors.
By that point, the decision had been made to sell the company, according to Schlesinger, the former Microsoft executive who most recently served as Tequila’s president. Siempre Tequila.
“I was hired by Inovia Capital and then led the company through an acquisition,” Schlesinger told TechCrunch. “They needed someone to steer the ship through this difficult process.”
An unlikely revival
This process did not work. On December 27, Bench abruptly closed its doors without giving its employees any notice or termination, several former employees told TechCrunch. The move was forced by a bank that claimed Bench’s project debt, Information reported. Bench continued to make sales until the closing day, according to a former employee.
The closure sparked a wave of media attention in the United States and Canada. Ironically, it was this interest that saved Bench, Schlesinger told TechCrunch.
“It was only after we closed our doors that all the PR, including you guys, made the world aware that we were for sale, and we had some huge interest after that,” Schlesinger said.
“I haven’t slept in 72 hours,” Schlesinger admitted.
The acquirers were unconventional. Jesse Tinsley, CEO of Employer.com, a human resources technology company based in San Francisco, was on vacation in Florida when he saw the news about Bench a day after the lockdown. Tinsley, who runs a group of human resources and recruitment-related businesses, had purchased the Employer.com domain name for about $450,000 just one month earlier. to publish On LinkedIn.
Tinsley and his team spent the next 36 hours reaching an agreement. By Monday morning, Employer.com officially announced its plans to acquire Bench for an undisclosed price.
“I didn’t officially meet anyone on the bench team until Saturday afternoon,” Tinsley said later chirpwhere he shared the infamous photo of Elon Musk holding a sink on Twitter, with just his face and his seat Modified in Photoshop In the photo. “However, we have saved hundreds of jobs and left thousands of customers in the lurch.”
Uncertainty remains
Employer.com makes big promises about the Bench revival. Initially, job offers are being remade to a “large number” of former Bench employees, Jennifer Boyukos, Bench’s chief people officer, told TechCrunch.
It also says it will honor customer contracts and service their accounts fully, Tinsley tweeted. Bench’s initial closing notice recommended its clients file a six-month extension with the IRS to find a new accountant. Now, Bench does not recommend add-ons as long as customers decide to stay with them.
But doubts remain about the Bench’s sustainability, given the cheap sale at the last minute.
Acquisitions typically take months and require extensive due diligence, which can be impossible to conduct over a weekend. Employer.com also had no direct accounting experience until the Bench acquisition, instead focusing on payroll, recruiting and other HR-related areas. If Bench’s downfall shows anything, it’s that accounting is its own beast.
There are also concerns about whether customers will be able to access the same quality of service, given the sudden dismissal of all Bench staff on December 27. Although many employees have been rehired, at least some are being offered only 30-day contracts, three former employees told TechCrunch.
In response, Employer.com’s chief marketing officer, Matt Charney, told TechCrunch that “while the deal went through quickly,” it involved “several law firms” and Employer.com feels “very comfortable” with Bench’s reputation and track record.
Regarding Employer.com’s lack of prior accounting experience, Charney says Bench was acquired for its employees, experience and clients, who can “help us gain that experience very quickly.” Employer.com declined to comment specifically on the contracts for 30 days as of press time.
