Friday, December 27th is supposed to be the start of the holiday weekend.
But Canada-based Bench, which raised $113 million from investors such as Bain Capital Ventures and Shopify; It's chaos for thousands of small business owners setting up accounting and tax startups.
That morning, they discovered that they were unable to log into their accounts properly because tax season had already begun. Bench's entire website was offline, except for a notice that the Bench was closing after 13 years of operation.
Several former employees told TechCrunch that hundreds of Bench's employees resigned or were effectively fired without notice. TechCrunch has retrieved emails sent to employees that day.
A customer who had stored data on Bench's website for years was even featured on its front page before it suddenly went offline, only to find out when it was shut down. TechCrunch called him. For the response.
“I didn't know that,” says Radiator co-founder Justin Metros. “No one has ever seen anything close like this. That's crazy.”
Bench's automation struggles.
Bench is designed to be a technology-forward accounting and tax startup with an intuitive platform that any small or medium-sized business can use. More than 12,000 users were claimed at the time of closure.
One reason for the company's struggles in recent years has been a push to adopt AI and other automation tools, according to some employees.
A former employee told TechCrunch that it's easier to automate accounting tasks like categorizing expenses in theory than in practice. A former employee says that Bench is the only way to measure AI, but its functionality is flawed and the tools it's built for don't work well. Over-reliance on these tools, sometimes at the expense of human accountants, results in delays by passing books around to different teams rather than staying with one employee.
Those delays caused some customers to quit. A former employee told TechCrunch that some clients were still waiting for their 2023 September 2024 books. A major tax deadline has passed.
According to ex-employees, the Bench has gone through several retrenchments since late 2022. By the end of 2024, fewer than 400 people work on LinkedIn, compared to nearly 700 in January 2023, Bench said.
Noise at the top
Due to confusion in the Executive of the Bench, the execution cases were compounded. Bench's first CEO, Ian Crosby, is leaving Bench in 2021, just months after raising a $60 million Series C round. Crosby alleged that he was forced to replace him with a “professional CEO” because he disagreed with strategic decisions.
“I hope Bench's story serves as a warning to VCs who think they can upgrade a company by replacing the founder. It never works,” Crosby wrote. LinkedIn post After suddenly shutting down.
Bench's second CEO is Jean-Philippe Durrios, who previously served as CFO. According to former employees, the focus is on making the company profitable. Automation is, in theory; Bench relies on costly human labor to service its many customers. But execution problems; The game didn't work out when customers churned and investor interest in non-AI companies waned.
Bench changed CEOs again in November 2024, bringing in one of Bench's investors, Adam Schlesinger, who resides as an executive at VC firm Inovia Capital.
That's when the decision to sell the company was made, according to Schlesinger, a former Microsoft executive who most recently served as the tequila company's president. Always Tequila.
“I was hired by Inovia Capital, and then I set up a process to acquire the company,” Schlesinger told TechCrunch. “We need someone to steer the ship through a difficult process.”
The Impossible Revival
The process does not fail. On December 27, the Bench suddenly closed without notice or resignation to its employees; Several former employees told TechCrunch. A bank was forced to transfer Bench's venture debt. The news reports. A former employee said the business continued until the day the office closed.
The closure drew media attention in the United States and Canada. Ironically, it was the focus that saved Bench, Schlesinger told TechCrunch.
“After we shut down all the PR, including yours, we let the whole world know we were selling, and we got some interest after that,” Schlesinger said.
“I haven't slept in 72 hours,” Schlesinger said.
Buyers are not traditional. Jesse Tinsley, CEO of San Francisco-based HR technology company Employer.com, was vacationing in Florida when he broke the news about Bench a day after the public shutdown. Tinsley, who runs several HR and recruiting businesses, previously bought the Employer.com domain name for $450,000 a month. Posted. LinkedIn.
It took Tinsley and his team another 36 hours to hammer out the deal. On Monday morning, Employer.com has officially announced plans to acquire Bench for an undisclosed price.
“I didn't officially meet with anyone on the Bench team until Saturday afternoon,” Tinsley later said. Tweeted.He shared the famous photo of Elon Musk sinking with his face on a bench on Twitter. With Photoshop into the picture. “However, we have saved hundreds of jobs and left thousands of customers in the dark.”
Uncertainty remains.
Employer.com is making big promises about reviving the Bench. to begin It is re-extending job offers to a “number” of former Bench staff; Jennifer Bouyoukos, Chief People Officer at Bench, told TechCrunch.
It also said it will honor customers' contracts and fully service their accounts. Tinsley tweeted.. Bench's initial notice of closure recommended its clients file for a six-month extension with the IRS to find a new accountant. Now, As long as users decide to stay, Bench does not recommend extensions.
But uncertainty remains surrounding Bench's sustainability due to its last-minute fire sale.
Acquisitions typically take months and require intense due diligence that is impossible to do on a holiday weekend. Employer.com had no direct experience in the accounting industry until the Bench acquisition – instead, It is wages, Focuses on recruitment and other HR related areas. If the fall of the Bench shows anything, Accounting is its own beast.
There are also concerns about whether customers will be able to get the same quality of service after all of Bench's staff were suddenly laid off on December 27. While many employees have been rehired, some have only been offered minimum 30-day contracts, he said. three former employees told TechCrunch.
In response, Matt Charney, chief marketing officer of Employer.com, told TechCrunch that “while the deal is happening quickly,” It has “a lot of legitimate companies” and Employer.com feels it's “very affordable” for Bench's reputation and track record.
In Employer.com's lack of previous accounting experience, Charney told the Bench that its people; “It can help you get that skill very quickly,” he says, with experiences and clients. Employer.com declined to comment specifically on the 30-day contracts as of press time.