The abrupt closure and subsequent acquisition of Bench Accounting has sent ripples through the small business community and the tech industry. Bench, a Vancouver-based startup that provided bookkeeping services to small businesses, unexpectedly announced its shutdown on Friday, leaving customers and employees in the lurch. Just days later, on Monday, the company revealed its acquisition by Employer.com, a San Francisco-based workforce management software provider. This rapid turn of events has raised numerous questions and sparked considerable controversy.
Bench, which touted itself as North America’s largest bookkeeping service for small businesses, had amassed over $100 million in funding since its inception in 2012, including a substantial $60 million round in 2021. The company’s business model revolved around combining automated data collection with human bookkeepers to handle the manual aspects of accounting, offering a comprehensive solution for small business owners and contractors. However, despite its significant funding and market presence, Bench’s sudden shutdown left many customers scrambling to find alternative solutions, particularly with the year-end looming. The swift transition from closure to acquisition has left many stakeholders wondering about the circumstances surrounding the initial shutdown announcement.
The closure announcement triggered immediate backlash from customers who had recently signed up for Bench’s services and made advance payments. Some, like Raman Morris, a Seattle-based entrepreneur, had committed to multi-year contracts and found themselves facing unexpected financial losses. Others, like Matt Palackdharry, founder of Kinetic Talents, were in the early stages of onboarding and felt misled by the abrupt closure. The sense of betrayal among customers was palpable, with many accusing Bench of “stealing money” from small businesses. The initial recommendation for customers to switch to Kick, another accounting software provider, offered little solace to those who felt wronged by Bench’s actions.
The acquisition by Employer.com, a relatively unknown entity in the accounting space, has added another layer of complexity to the situation. Employer.com, which offers workforce management software including payroll and compliance tools, appears to be a recent venture led by Jesse Tinsley, a serial entrepreneur in the HR tech space. Tinsley also runs Recruiter.com, a publicly traded company, and BountyJobs. Interestingly, Employer.com seems to have been a relatively new platform, with its domain acquired by Tinsley just a month prior. Furthermore, the company did not appear to offer accounting services before its acquisition of Bench, raising questions about the strategic rationale behind the deal.
While the acquisition offers a potential lifeline for Bench’s customers, guaranteeing the continuation of their service, the details of the transition remain unclear. TechCrunch reported that customers would be able to port their data or maintain their service under the new ownership. However, the specifics of this process, especially considering the different platforms and service offerings of the two companies, are yet to be clarified. The sudden recall of Bench employees, initially laid off during the closure announcement, points to an effort to ensure service continuity. However, the long-term implications for these employees, who experienced the roller coaster of layoff and reinstatement within days, remain uncertain.
The backstory of Bench’s leadership adds further intrigue to the narrative. Jean-Philippe Durrios, appointed CEO in 2022, stepped down in November, just a month before the company’s closure, leaving the company in a potentially vulnerable position. Ian Crosby, Bench’s co-founder and former long-time CEO, who left the company in December 2021, revealed in a LinkedIn post that his departure stemmed from disagreements with the board over strategic direction. This revelation suggests internal tensions and potential strategic missteps that might have contributed to the company’s eventual downfall. The combination of leadership changes and strategic disagreements paints a picture of internal turmoil that may have played a role in Bench’s ultimate fate.
In conclusion, the Bench Accounting saga highlights the precarious nature of the startup ecosystem. Despite significant funding and a promising business model, internal conflicts, strategic miscalculations, and unforeseen circumstances can lead to rapid decline. The abrupt closure, followed by a hasty acquisition, leaves behind a trail of unanswered questions and disgruntled customers. While the future of Bench’s services seems assured under Employer.com, the long-term implications of this tumultuous transition for both customers and employees remain to be seen. The narrative underscores the importance of transparency and communication in times of crisis, and the lasting impact of abrupt decisions on stakeholders across the board. The broader implications of this event for the fintech landscape and the trust placed in venture-backed startups will continue to be discussed and analyzed in the coming months.
