Bench, the accounting startup that went bankrupt during the holidays, filed for bankruptcy in Canada on January 7, disclosing huge debts, according to documents obtained by TechCrunch.
The filings (one with Bench and one with 10Sheet, Bench's original name) show that Bench had $2.8 million in cash on hand by the end of its lifespan, but $65.4 million in cash. This indicates that they were in debt. (TechCrunch converted bankruptcy filing data from Canadian dollars to US dollars at a rate of 1 US dollar to 1.44 Canadian dollars.) Founded in 2012, Bench has raised $113 million from investors including Shopify and Bain Capital Ventures. was procured.
Most of Mr. Bench's debts ($50 million) are owed to the National Bank of Canada, one of Canada's largest commercial banks. More than 85% of its debt is unsecured, meaning the bank has little collateral to claim on the loan now that the bench has defaulted. This debt may have played a role in prompting Bench's sudden closure. Tech publication Newcomer reported that NBC refused to make concessions to the bench, which was being bought and sold. NBC did not immediately respond to a request for comment.
The bankruptcy filing also revealed that Bench's financial obligations to venture capital investors are split between convertible bonds (intended to be converted into equity) and direct loans to shareholders. Bench owes Bain Capital Ventures $1.3 million, and Bain Capital Ventures partner Sara Hinkfuss was appointed to Bench's board in 2023, according to a press release. . Bench owes an additional $1.2 million to Canadian venture capital firm Innovia Capital, whose resident executive Adam Schlesinger has been named Bench's final CEO, according to filings. . Contour Venture Partners, the New York-based VC that led Bench's $60 million Series C round, has about $750,000 in debt. Another investor, California-based Altos Ventures, is owed $777,000. All of this VC-related debt is unsecured, the filing states.
Mr. Bench's other debts include $1.8 million in severance payments to former employees, according to the documents. TechCrunch previously reported that Bench staffers were abruptly fired on December 27th without any notice or severance packages. (Bench's new owner, Employer.com, says it has rehired a number of staff, but told TechCrunch that Bench has entered into a temporary 30-day contract to resolve the issue.) )
The bench also pays out tens of thousands of dollars in severance packages to former executives. CEO Jean-Philippe Durios, chief investment officer Todd Damm, and chief financial officer Moe Lacritz are all named in the filing. There is. Bench's annual recurring revenue was about $50 million, according to Lakritz's LinkedIn.
Finally, Bench probably owes Canadian real estate company Molgard $4 million in unpaid rent on its offices, according to the bankruptcy filing. At its peak, Bench employed more than 600 people. Beyond the employees, office space and about $1.5 million (according to behind-the-scenes calculations), filings don't reveal what happened to the rest of the money, as potential creditors are spread out, including SaaS business software providers. is not shown. I spent it.
While Bench is weathering bankruptcy, it is also being acquired by San Francisco-based HR technology company Employer.com. However, the company's customers also told TechCrunch that Employer.com requires them to hand over their data to Employer or risk losing it.
Gary Levin, head of corporate development at Employer.com, told TechCrunch that a Canadian court is overseeing Bench's bankruptcy proceedings and will oversee the distribution of proceeds to creditors. He emphasized that Employer.com has a strong balance sheet that allows it to invest significantly in Bench going forward.