- Bench consistently struggled with profitability, spending $135 million from 2012 to September 2024.
- The startup experienced rapid revenue growth but continued to accumulate significant losses.
- Employer.com announced plans to acquire Bench just 72 hours after its collapse.
Newly released bankruptcy documents are shedding light on the dramatic downfall of Bench, a Canadian cloud accounting startup that burned through $135 million before shutting down in September 2024.
The filings reveal a stark financial picture: by its collapse, Bench had just $800,000 in its Canadian account and less than $400,000 in its U.S. entity.
Despite efforts to control spending, the company consistently failed to achieve profitability.
Under its second CEO, a former CFO who took over in 2022, Bench made some progress. From March 2022 to March 2023, the company lost nearly $30 million on $42 million in revenue.
The following fiscal year saw losses halved and revenue grow to $49 million, but these improvements proved insufficient.
In June 2024, National Bank of Canada (NBC) extended over $40 million in loans, temporarily providing a lifeline. Remarkably, just 13 days before Bench's collapse, NBC signed a new funding agreement.
However, shortly after, the bank reportedly called in the startup's venture debt.
The company's unexpected twist came when Employer.com announced its acquisition plan just 72 hours after Bench's shutdown, with a potential closing date of February 28, 2025.
Bench's story serves as a cautionary tale about startup financing, highlighting the risks of sustained losses and the critical role venture debt lenders play in the current startup ecosystem.
As experts predict continued turbulence, Bench's narrative underscores the challenges facing tech startups striving for financial sustainability.
Edited By Annette George
