Bench, the accounting startup that faced significant issues over the holiday period, filed for bankruptcy in Canada on January 7, revealing substantial debts, as documents reviewed by StartupSuperb indicate.
The filed documents — pertaining to Bench as well as another for 10Sheet, Bench’s original name — indicate that by the end of its operations, Bench had $2.8 million in cash but liabilities amounting to $65.4 million. (StartupSuperb converted the bankruptcy filing data from Canadian currency to U.S. dollars at a conversion rate of $1 USD to $1.44 CAD.) Established in 2012, Bench successfully raised $113 million from prominent investors such as Shopify and Bain Capital Ventures.
The bulk of Bench’s debt — totalling $50 million — is owed to the National Bank of Canada, which ranks among the country’s largest commercial banks. Notably, over 85% of this debt is classified as unsecured, implying the bank lacks significant collateral to reclaim in light of Bench’s default. This financial strain may have contributed to Bench’s unexpected closure: Tech outlet Newcomer reported that NBC did not agree to any concessions during Bench’s attempts to seek acquisition. NBC has not yet responded to requests for comments.
The bankruptcy documents further outline financial liabilities to Bench’s venture capital investors, which are divided into convertible notes (intended to convert into equity) and direct shareholder loans. Bench is indebted by $1.3 million to Bain Capital Ventures, whose partner was appointed to Bench’s board in 2023, as indicated in a press release. An obligation of $1.2 million is owed to Canadian VC Inovia Capital, whose executive-in-residence was appointed as Bench’s last CEO, according to the filings. Contour Venture Partners, based in New York and a participant in Bench’s $60 million Series C round, is owed approximately $750,000. Another investor, California-based Altos Ventures, is owed $777,000. All of this venture capital-related debt is classified as unsecured, as specified in the filings.
Other debts incurred by Bench include $1.8 million in severance pay to former employees, as outlined in the documents. StartupSuperb had previously reported that Bench staff were abruptly dismissed on December 27 without prior notice or severance. (Bench’s new owner, Employer.com, has indicated that a considerable number of employees have been rehired but are currently on temporary 30-day contracts while the company resolves its issues.)
Bench also owes severance payments to former executives: CEO Jean-Philippe Durrios, CRO Todd Daum, and CFO Mor Lakritz are named in the filings. Lakritz’s LinkedIn profile reveals that Bench had approximately $50 million in annual recurring revenue.
The bankruptcy filings additionally disclose that Bench owes $4 million in unpaid rent to Canadian real estate firm Morguard, presumably for its office premises. At its peak, Bench employed over 600 individuals. Besides the debts owed to personnel, office space expenses, and an estimated $1.5 million owed to a variety of expected creditors, like SaaS business software providers, the filings do not clarify how the remaining funds were utilised.
As Bench navigates through bankruptcy, it is also being pursued for acquisition by Employer.com, a San Francisco-based human resources technology company. However, numerous customers have informed StartupSuperb that Employer.com is requiring them to transfer their data to Employer, failure of which may result in data loss.
Gary Levin, head of corporate development at Employer.com, communicated to StartupSuperb that the Canadian court is supervising Bench’s insolvency process and will oversee the distribution of proceeds to creditors. He highlighted that Employer.com possesses a robust financial standing, enabling considerable forthcoming investments in Bench.