Vancouver’s Bench Accounting suddenly ceased operations Friday, potentially putting hundreds out of work and leaving customers of the bookkeeping company – which had raised more than US$100-million from leading tech investors, including Shopify Inc. – scrambling for alternatives.
The previous homepage of the Bench website was replaced Friday with a “notice of service closure” that said its platform was no longer accessible and that customers can expect to receive more information about how to access their data by Dec. 30.
“We know this news is abrupt and may cause disruption, so we’re committed to helping Bench customers navigate through the transition,” the notice said, which also recommended customers switch to San Francisco-based accounting startup Kick.
In a post on X, Shopify chief operations officer Kaz Nejatian blamed the shutdown on the decision in late 2021 to replace Bench co-founder Ian Crosby with Jean-Philippe Durrios as chief executive officer.
“Bad investors destroyed a great Canadian company by replacing the founder with so-called professionals,” Mr. Nejatian wrote.
Tobi Lutke, Shopify’s founder and CEO, replied to Mr. Nejatian’s post, saying: “this is exactly what happened. Replacing Ian Crosby is what killed the company.”
Mr. Crosby ran Bench as CEO until late 2021, when he left to launch another accounting startup called Teal alongside Adam Saint, a fellow Bench co-founder. Teal was acquired by U.S. fintech company Mercury in September, and Mr. Crosby is now listed as Mercury’s head of accounting products.
Multiple unverified reports said Bench has filed for creditor protection and that its roughly 450 employees had been laid off, though Mr. Durrios did not respond to multiple requests for confirmation. Bench first launched in 2011 and at its peak had a staff of nearly 700.
Customers of the now-shuttered accounting subscription service were quick to voice their frustration.
“After being a loyal client and partner since 2019, I’m feeling completely blindsided,” Monika Rose, founder and CEO of artisan market Grapes & Goods, said in a LinkedIn post. “Over the past year, I noticed higher team turnover and slower communication, but I chose to give them the benefit of the doubt. Just weeks ago, I even decided to onboard my new company with them. Now, I’m left with no books and feeling deeply let down.”
Richie McIlroy had been a Bench customer for just two months when he learned the company was shutting down. His company, a Liverpool, England-based screen-recording sharing startup called Cap that he describes as an open-source alternative to the video messaging app Loom, paid Bench nearly US$2,000 for 10 months of backfilling and two monthly subscription payments.
“They very happily took our money,” Mr. McIlroy told The Globe. “Nothing has been completed. It was supposed to be completed by the start of January, just in time for our first filing. This situation is absolutely ridiculous.”
Bench was co-founded by Ian Crosby, and in 2012, the company joined the TechStars accelerator program in New York as 10sheet Inc. before changing its name to Bench Accounting and moving to Vancouver the following year. Bench went on to raise roughly US$113-million from some of the biggest names in the technology space.
Shopify participated in its most recent fundraising round in 2021, which also included Inovia Capital, Altos Ventures and Contour Partners. British small-business software maker Sage Group also participated in that round and Bank of Montreal provided some debt.
In a statement posted to his personal social accounts on Friday, Mr. Crosby said he was “very sad to see that Bench Accounting has shut down.”
He said he was “fired from the company I co-founded” while having lunch with a member of the Bench board of directors in November of 2021.
“The board member thanked me for bringing the company to this point, but that they would be bringing in a new professional CEO to ‘take the company to the next level,’ ” Mr. Crosby wrote. “I was totally convinced that their approach would destroy the company.”
“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,” he said. “It never works.”