Venture capital firm Khosla Ventures has invested USD 10 million in Ian Crosby, the former founder and chief executive of the now defunct accounting startup Bench, for his new bookkeeping venture, Synthetic. The investment signals a significant bet on an entrepreneur who previously led a company into an abrupt shutdown.
Crosby is now building Synthetic, a service described as a fully autonomous artificial intelligence bookkeeping platform designed specifically for other startup companies. The new venture aims to address financial record keeping tasks that have traditionally required human accountants.
Background on Bench’s failure
Bench, previously a prominent player in the online bookkeeping space, collapsed in late 2024. The company had raised over USD 100 million in venture capital from investors including Bain Capital Ventures and Altos Ventures before ceasing operations.
At the time of its shutdown, Bench employed over 600 people. The company’s failure left thousands of small business clients without access to their financial records and books for an extended period, causing significant disruption and concern within the startup ecosystem.
Synthetic’s proposed model
According to available information, Synthetic intends to leverage artificial intelligence to handle the full cycle of bookkeeping tasks. This includes categorizing transactions, reconciling accounts, and producing financial statements without direct human intervention.
The platform is designed to serve other startups, a market segment that often requires accurate financial records for investor reporting and regulatory compliance but may lack the resources for a large accounting staff. The use of AI in this context aims to reduce costs and potential errors associated with manual data entry.
Investor perspective
Khosla Ventures has a history of backing founders who have experienced failure in previous ventures. The firm’s partners have publicly stated that lessons learned from past business failures can be valuable for future success.
The USD 10 million investment represents a strong vote of confidence in Crosby’s ability to execute a technology driven solution in the accounting space, despite the disappointing outcome of his prior company. The funding will likely be used for product development, hiring engineers, and acquiring initial customers.
Market implications
The accounting software market is highly competitive, with established players like QuickBooks, Xero, and FreshBooks dominating the small business segment. Many of these platforms have been integrating AI features to automate repetitive tasks and improve accuracy.
Synthetic’s entry into this space with a fully autonomous model is a notable development. The success of this venture will depend on the platform’s ability to handle complex accounting scenarios that often require professional judgement and on its capacity to gain trust from startup founders and their investors.
Industry observers will be closely monitoring how Synthetic differentiates itself from existing AI enhanced tools and how it manages the transition of clients who may have been affected by Bench’s failure.
Source: Delimiter
