Khosla Ventures Backs Ian Crosby’s New AI Bookkeeping Startup with $10M Investment
Ian Crosby, the entrepreneur behind the now-defunct Bench Accounting, is embarking on a new venture aimed at revolutionizing the bookkeeping industry through artificial intelligence. His latest startup, Synthetic, aspires to develop a fully autonomous AI bookkeeper capable of generating accrual-based financial statements without human intervention. Despite the product being in its conceptual phase and facing technological uncertainties, Synthetic has successfully secured $10 million in seed funding. This round was led by Khosla Ventures, with additional participation from Basis Set Ventures and Shopify CEO Tobias Lütke.
A Bold Investment Amidst Controversy
Investing in a founder whose previous enterprise collapsed might seem counterintuitive. However, Khosla Ventures partner Jon Chu embraces such challenges. I tend to run towards controversy a little bit, Chu remarked. He believes that prevailing narratives often overshadow the truth, citing Parker Conrad’s journey from Zenefits to founding Rippling, now valued at nearly $17 billion, as an example. Chu expressed confidence in Crosby’s potential for growth and redemption.
The Bench Accounting Saga
Bench Accounting, Crosby’s prior startup, faced significant turmoil leading to its shutdown in 2024. Crosby contends that his departure in 2021, three months after rejecting a $250 million acquisition offer from Brex, was not of his own volition but a decision made by the board. Disagreements over strategic direction and concerns about cash flow were central to this decision. Despite new management efforts, Bench could not recover, ultimately leading to its dissolution.
A Journey of Learning and Resilience
Post-Bench, Crosby’s career included a tenure at Shopify and the founding of Teal, another accounting-focused startup acquired by Mercury within 18 months. These experiences have been instrumental in his professional development. Chu, after consulting with executives who collaborated with Crosby during this period, noted, They all had fantastic things to say about Ian. This feedback reinforced Chu’s belief in Crosby’s capacity to learn from past experiences and apply those lessons to Synthetic.
Synthetic’s Vision and Challenges
Synthetic is committed to delivering a fully autonomous AI-driven bookkeeping service, distinguishing itself from competitors like Xero that still rely on human accountants. Crosby is adamant about this approach, stating, We’re not going to release anything that’s not fully autonomous. It’s that or bust. Initially, Synthetic plans to cater exclusively to AI and software startups. However, Crosby acknowledges the current limitations of AI models, which still make significant errors in bookkeeping tasks. While the prototype functions effectively for a select group of users, scaling the solution presents uncertainties. Crosby likens the situation to a self-driving car capable of navigating a single street but untested on a broader scale. Despite these challenges, he remains optimistic, emphasizing that the substantial funding allows the company to patiently await advancements in foundational AI models.
