Inside the Wild Fall and Last-Minute Revival of Bench: A VC-Backed Accounting Startup
The Unexpected Shutdown of Bench: A Tech-Focused Accounting Startup
On December 27, Bench, a Canadian-based accounting startup, caused a stir in the business community when it suddenly shut down just before the busy tax season. Founded in 2010, Bench had raised $113 million from notable investors such as Bain Capital Ventures and Shopify. It had positioned itself as a tech-forward solution for small businesses to manage their accounting and taxes. However, everything changed that fateful morning.
What Led to Bench’s Abrupt Shutdown?
Customer Panic and Employee Layoffs
Bench’s website went offline without any prior notice, leaving customers unable to access their accounts. Small business owners, who relied on Bench to manage their taxes, were caught off guard. Even more alarming, hundreds of employees were laid off without notice or severance, making the shutdown even more abrupt.
Customers were forced to find alternative solutions for their accounting needs as they were unable to access years’ worth of financial data stored on the platform. The shutdown was so unexpected that many business owners only learned about it through media reports.
The Root Causes: Automation Struggles and AI Overdependence
One of the major reasons for Bench’s downfall was its over-reliance on AI and automation tools. Bench had positioned itself as a tech-forward company leveraging AI to streamline accounting processes. However, according to former employees, automating accounting tasks wasn’t as simple as it seemed. Flawed AI tools and the complexity of scaling led to delays in providing quality service, with some customers waiting for their 2023 books until September 2024.
Leadership Challenges and Executive Turnover
A Turbulent Journey of Leadership Changes
The sudden downfall was compounded by constant leadership changes at Bench. Ian Crosby, the co-founder and first CEO, left in 2021 after disagreements with the board. This was followed by the appointment of Jean-Philippe Durrios and later Adam Schlesinger in November 2024. Despite multiple rounds of layoffs and restructuring efforts, Bench’s issues with execution and lack of direction continued to grow.
The Final Blow: Venture Debt and Sudden Shutdown
In December 2024, Bench was forced to shut down after its venture debt was called in by the bank. Despite continuing to make sales, Bench’s financial position had become untenable, forcing the company to shut down immediately.
The Surprising Acquisition of Bench by Employer.com
How Employer.com Stepped In to Save Bench
Just when things seemed bleak, Employer.com, led by Jesse Tinsley, stepped in. After seeing the media coverage about Bench’s collapse, Tinsley and his team quickly negotiated an acquisition. Within 36 hours, Employer.com finalized a deal to acquire Bench, saving hundreds of jobs and thousands of customers.
This acquisition was unconventional, as Employer.com had no prior experience in accounting. However, they acquired Bench for its people, experience, and the customer base that came with it.
The Revival Plan: What’s Next for Bench?
Under Employer.com’s leadership, Bench is set to be revived. The company plans to rehire many of the laid-off employees and continue serving its existing customers. However, questions remain about the quality of service given the sudden change in ownership and the lack of prior accounting experience by Employer.com.
Challenges Ahead: Will Bench Survive the Revival?
Will Employer.com Be Able to Sustain Bench’s Success?
Despite the enthusiasm surrounding the revival of Bench, the future is still uncertain. Employer.com’s experience is primarily in HR tech, not accounting. Will they be able to revive Bench’s accounting services and meet the expectations of customers who’ve experienced significant disruption?
There’s also uncertainty surrounding the quality of services Bench will provide post-acquisition, especially with some employees being offered only 30-day contracts.
Conclusion: A Cautionary Tale for Startups
The rise and fall of Bench serves as a cautionary tale for startups in the tech space, particularly those in the fintech and accounting sectors. The challenges of scaling AI tools and the need for stable leadership during critical times have proven to be lessons that startups must heed.
For small business owners who relied on Bench for their accounting and tax needs, the future remains uncertain. However, there’s hope that Employer.com can bring about a successful turnaround and restore Bench’s reputation in the long run.
