Bench, the once-promising accounting startup that met an abrupt end during the holiday season, submitted its bankruptcy application in Canada on January 7, unveiling substantial debts, as disclosed in documents reviewed by TechCrunch.
The bankruptcy documents — one pertaining to Bench and another for 10Sheet, Bench’s initial name — indicate that the company had $2.8 million in cash remaining at the conclusion of its operations but faced liabilities totaling $65.4 million. (TechCrunch converted the financial data from Canadian to U.S. dollars using an exchange rate of $1 USD to $1.44 CAD.) Established in 2012, Bench had raised $113 million from notable investors, including Shopify and Bain Capital Ventures.
The majority of Bench’s debt — amounting to $50 million — is owed to the National Bank of Canada, a leading commercial bank in the country. Remarkably, over 85% of this obligation is unsecured, suggesting that the bank has minimal collateral to recover following Bench’s default. This substantial debt may have contributed to the company’s swift closure: according to Tech publication Newcomer, NBC declined to offer any concessions to Bench while it was being considered for sale. NBC has not yet responded to requests for comment.
Additionally, the bankruptcy filings shed light on Bench’s financial responsibilities towards its venture capital investors, which are categorized into convertible notes (intended for conversion to equity) and direct shareholder loans. Bench is obligated to pay $1.3 million to Bain Capital Ventures, whose partner Sarah Hinkfuss joined Bench’s board in 2023, according to a press release. The company owes another $1.2 million to Canadian VC Inovia Capital, linked to its last CEO, Adam Schlesinger. Contour Venture Partners, which led Bench’s $60 million Series C funding round, is owed approximately $750,000, while California’s Altos Ventures is awaiting $777,000. All of this VC-related debt is classified as unsecured, according to the filings.
Moreover, Bench must pay $1.8 million in severance to former employees, with TechCrunch previously reporting that the staff was abruptly let go on December 27 without any notice or severance package. (Following the acquisition by Employer.com, a significant portion of former employees have been re-hired, though they are temporarily on 30-day contracts while Bench addresses its various challenges.)
The filings also reveal that several former executives, including CEO Jean-Philippe Durrios, CRO Todd Daum, and CFO Mor Lakritz, are owed tens of thousands in severance pay. Lakritz’s LinkedIn profile indicates that Bench achieved an annual recurring revenue of around $50 million.
In addition to the aforementioned obligations, the bankruptcy filings indicate that Bench owes $4 million in back rent to Canadian real estate firm Morguard, likely related to its office space. At its peak, Bench employed over 600 individuals. Besides debts to employees and landlords, and roughly $1.5 million owed to a variety of other anticipated creditors, including SaaS providers, the filings do not clarify the expenditure of the remaining funds.
As Bench navigates its bankruptcy proceedings, it is simultaneously in the midst of being acquired by San Francisco-based HR technology firm Employer.com. However, customers have reported to TechCrunch that Employer.com is mandating them to surrender their data to the new owners or risk losing access to it.
Gary Levin, Employer.com’s head of corporate development, informed TechCrunch that the insolvency process for Bench is being monitored by a Canadian court, which will oversee the allocation of funds to creditors. He stressed that Employer.com possesses a robust financial foundation, enabling significant future investments in Bench.
Compiled by Techarena.au.
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