Inside the wild fall and last-minute revival of Bench, the VC-backed accounting startup that imploded over the holidays

Friday, December 27, was supposed to be the start of a relaxing holiday weekend.

But it was chaos for thousands of small business owners who use Bench, an accounting and tax startup based in Canada that raised $113 million from investors like Bain Capital Ventures and Shopify.

That morning, they found themselves unable to log into their accounts right as tax season was starting. Bench’s entire website was offline except for a notice that Bench had shut down after 13 years of operation. 

Bench’s hundreds of staff found themselves laid off effective immediately without any severance or notice, multiple ex-employees told TechCrunch. Emails TechCrunch sent to employees that day bounced back. 

The move was so sudden that one customer who kept years of data on Bench’s website, and was even featured on its front page before it went offline, learned of the shutdown only when TechCrunch called him for a reaction. 

“I was not aware of that,” Justin Metros, co-founder of Radiator, said. “I’ve never seen anyone just shut down like that. That’s crazy.”

Bench’s automation struggles

Bench portrayed itself as a tech-forward bookkeeping and tax startup with an intuitive platform that any small or mid-size business could use. It claimed more than 12,000 customers by the time it shut down.

One reason for the company’s struggles was a push to embrace AI and other automation tools in recent years, according to some staffers. 

It turns out that it’s simpler to automate accounting tasks, like categorizing expenses, in theory than in practice, former staff told TechCrunch. One former employee claimed the only way Bench could scale was AI, but its execution was flawed and the tools it built didn’t work properly. Overreliance on these tools, sometimes at the expense of human bookkeepers, caused delays, with books passed around different teams instead of staying with one staffer. 

Those delays caused some customers to quit. One former employee told TechCrunch some customers were still waiting for their 2023 books in September 2024, well past key tax deadlines. 

According to the former staffers, Bench went through multiple rounds of layoffs starting in late 2022. By the end of 2024, less than 400 people said they worked at Bench on LinkedIn, compared to almost 700 in January 2023.

Tumult at the top

Execution issues were compounded by tumult in Bench’s executive suite. Bench’s first CEO, co-founder Ian Crosby, left in 2021 a few months after Bench raised a $60 million Series C round. Crosby accused unnamed board members of forcing him out to be replaced by a “professional CEO” after he disagreed with strategic decisions.

“I hope the story of Bench goes on to become a warning for VCs that think they can ‘upgrade’ a company by replacing the founder. It never works,” Crosby wrote in a LinkedIn post after the sudden shutdown.

Bench’s second CEO was Jean-Philippe Durios, who had previously served as CFO. He focused on making the company profitable, according to former staff. Automation could, in theory, make Bench rely less on costly human labor to service its many customers. But the gambit didn’t work amid execution issues, customer churn, and waning investor interest in non-AI-related companies. 

Bench switched CEOs yet again in November 2024, bringing in Adam Schlesinger, an executive-in-residence at VC firm Inovia Capital, one of Bench’s investors. 

By that point, a decision was made to sell the company, according to Schlesinger, a former Microsoft executive who also recently served as the president of a tequila company, Siempre Tequila. 

“I was put in place by Inovia capital and then took the company through a process to go get acquired,” Schlesinger told TechCrunch. “They needed somebody to steer the ship through what is a hard process.”

An unlikely revival

That process didn’t pan out. On December 27, Bench abruptly shut down without giving its employees any notice or severance, multiple former staff told TechCrunch. The move was forced by a bank calling in Bench’s venture debt, The Information reported. Bench had continued making sales right up to the day of the shutdown, according to a former employee.

The shutdown sparked a rash of media attention in the US and Canada. Ironically, it’s that attention which saved Bench, Schlesinger told TechCrunch. 

“It was only after we shut down that all the P.R., including from you guys, basically made the world aware that we were for sale, and we had some great interest after that,” Schlesinger said.

“I haven’t slept in 72 hours,” Schlesinger admitted. 

The acquirers were unconventional. Jesse Tinsley, the CEO of Employer.com, an HR tech firm based in San Francisco, was on vacation in Florida when he saw the news about Bench a day after the public shutdown. Tinsley, who runs a host of HR and recruiting-related businesses, had only bought the Employer.com domain name for about $450,000 a month before, he posted on LinkedIn.

Tinsley and his team spent the next 36 hours hammering out a deal. By Monday morning, Employer.com had officially announced its planned acquisition of Bench for an undisclosed price. 

“I had never formally met anyone on the Bench team until Saturday afternoon,” Tinsley later tweeted, sharing the infamous photo of Elon Musk carrying a sink into Twitter, only with his face and a bench photoshopped into the image. “Nonetheless we saved hundreds of jobs and thousands of customers being left in a huge lurch.”

Uncertainty remains

Employer.com is making big promises about reviving Bench. To start, it is re-extending job offers to a “large number” of former Bench staff, Bench Chief People Officer Jennifer Bouyoukos told TechCrunch. 

It also says it will honor customer contracts and fully service their accounts, Tinsley tweeted. Bench’s initial shutdown notice recommended its clients file for a six-month extension with the IRS to find a new bookkeeper. Now, Bench isn’t recommending extensions as long as customers decide to stay on.

But there are uncertainties remaining around Bench’s sustainability, given its last-minute fire sale. 

Acquisitions typically take months and require extensive due diligence, which would be impossible to conduct over a holiday weekend. Employer.com also had no direct experience in accounting until the Bench acquisition — instead, it focuses on payroll, recruiting, and other HR-related fields. If Bench’s downfall shows anything, it’s that accounting is its own beast.

There are also concerns about whether customers will have access to the same quality of service, given the sudden firing of all of Bench’s staff on December 27. Although many staff are being hired back, 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 happened quickly,” it involved “multiple legal firms” and Employer.com feels “very very comfortable” with Bench’s reputation and track record.

On Employer.com’s lack of prior accounting experience, Charney says that Bench was acquired for its people, experience, and customers, who can “help us acquire that expertise very, very quickly.” Employer.com declined to comment specifically on the 30-day contracts as of press time.