Friday December 27th was supposed to be the start of a relaxing holiday weekend.
But it was chaos for the thousands of small business owners who use Bench, a Canada-based accounting and tax startup that raised $113 million from investors like Bain Capital Ventures and Shopify.
That morning, they found themselves unable to access their accounts just as tax season was starting. The entire Bench website was offline except for an announcement that the Bench had closed after 13 years of operation.
Hundreds of Bench employees found themselves immediately laid off without any layoff or notice, multiple former employees told TechCrunch. Emails TechCrunch sent to employees that day were bounced back.
The move was so sudden that a customer who kept years of data on Bench’s website, and was even featured on its front page before it went offline, only learned of the shutdown when TechCrunch called him for a reaction.
“I wasn’t aware of that,” said Justin Metros, co-founder of Radiator. “I have never seen anyone close like this. This is madness.”
Bench automation struggles
Bench portrayed itself as a tech-forward accounting and tax startup with an intuitive platform that any small or medium-sized business can use. It claimed more than 12,000 customers by the time it closed.
One reason for the company’s struggles was a push to embrace AI and other automation tools in recent years, according to some employees.
It turns out that it’s easier to automate accounting tasks, like categorizing expenses, in theory than in practice, the former TechCrunch staffer said. One former employee claimed that the only way Bench could scale was with AI, but its execution was flawed and the tools it built didn’t work properly. Over-reliance on these tools, sometimes at the expense of human accountants, caused delays, with books going through different teams rather than staying with one employee.
These delays caused some customers to leave. A former employee told TechCrunch that some customers were still waiting for their 2023 books in September 2024, well past 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 almost 700 in January 2023.
Crowd at the top
Matters of execution were exacerbated by unrest in the Bench’s executive suite. Bench’s first CEO, co-founder Ian Crosby, left in 2021 months after Bench raised a $60 million Series C round. Crosby accused unnamed board members of forcing him to be replaced by a “professional CEO” after he disagreed with strategic decisions.
“I hope Bench’s story continues to serve as a warning to VCs who think they can ‘improve’ 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, in theory, could make Bench rely less on costly human labor to serve its many customers. But the gambit backfired amid execution issues, customer churn and declining investor interest in non-AI companies.
Bench changed CEO again in November 2024, bringing in Adam Schlesinger, an executive at VC firm Inovia Capital, one of Bench’s investors.
At that point, a decision was made to sell the company, according to Schlesinger, a former Microsoft executive who also recently served as president of a tequila company, Siempre Tequila.
“I was pitched by Inovia Capital and then took the company through a process to go for acquisition,” Schlesinger told TechCrunch. “They needed someone to steer the ship through a difficult process.”
An impossible resurrection
This process is not over. On Dec. 27, Bench was abruptly shut down without notice to its employees or layoffs, multiple former employees told TechCrunch. The move was forced by a bank seeking Bench’s venture debt, The Information reported. Bench had continued to make sales until the day it closed, according to a former employee.
The shutdown generated a great deal of media attention in the US and Canada. Ironically, it’s the attention that saved Bench, Schlesinger told TechCrunch.
“Just after we closed, all the PR, including you guys, basically made the world aware that we were for sale, and we got a lot of interest after that,” Schlesinger said.
“I haven’t slept in 72 hours,” Schlesinger admitted.
The buyers were unconventional. Jesse Tinsley, CEO of Employer.com, a San Francisco-based HR technology firm, was on vacation in Florida when he saw the news about Bench the day after the public closing. Tinsley, who runs a host of HR and recruiting-related businesses, had purchased the Employer.com domain name alone for about $450,000 a month ago, he posted on LinkedIn.
Tinsley and his team spent the next 36 hours working out a deal. By Monday morning, Employer.com had officially announced its planned acquisition of Bench for an undisclosed price.
“I had never officially met anyone on the bench team until Saturday afternoon,” Tinsley later tweeted, sharing the infamous picture of Elon Musk holding a sink on Twitter, with just his face and a bench photoshopped into image. “However, we saved hundreds of jobs and thousands of customers were left in the lurch.”
Uncertainty remains
Employer.com is making big promises about reviving the Bench. To start, it’s 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 customers’ contracts and fully service their accounts, Tinsley tweeted. Bench’s initial closing notice recommended her clients file for a six-month extension with the IRS to find a new accountant. Now, Bench isn’t recommending extensions as long as customers decide to stay.
But there is uncertainty about Bench’s durability, given his last-minute sale.
Acquisitions typically take months and require extensive due diligence that would be impossible to accomplish 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 areas. 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 sacking of all Bench staff on 27 December. Although many staff are being rehired, at least some are being offered only 30-day contracts. three former employees told TechCrunch.
In response, Employer.com chief marketing officer Matt Charney told TechCrunch that “while the deal happened quickly,” it involved “multiple law firms” and Employer.com feels “very comfortable” with Bench’s reputation and history.
Of Employer.com’s lack of prior accounting experience, Charney says Bench was bought for its people, experience and clients, who can “help us gain that expertise very, very quickly.” Employer.com declined to comment specifically on the 30-day contracts as of press time.
