Failed fintech startup Bench racked up more than $65 million in debt, documents reveal

Seat, start accounting it It exploded over the holidaysfiled for bankruptcy in Canada on January 7 and disclosed massive debts, documents seen by TechCrunch show.

Deposits – One for the seat And another For 10 sheetsthe original name of the Bench – shows that the Bench had $2.8 million in cash on hand by the end of its life but $65.4 million in liabilities. (TechCrunch converted bankruptcy filing data from Canadian dollars to U.S. dollars at a rate of $1 to $1.44 Canadian.) Founded in 2012, Bench has raised $113 million from investors like Shopify and Bain Capital Ventures.

Most of Bench’s debt — $50 million — is owed to the National Bank of Canada, one of Canada’s largest commercial banks. More than 85% of this debt is unsecured, meaning the bank has little collateral to claim against the loan now that Bench Bank has defaulted. This debt may have helped lead to the sudden closure of Bench: Tech Publishing The newcomer reported That NBC refused to make concessions to Bench as the sale was being shopped. NBC did not immediately respond to a request for comment.

The bankruptcy filings also reveal financial obligations to Bench’s venture capital investors, which are split between convertible securities (which are intended to be converted into stock) and direct shareholder loans. Bench owes $1.3 million to Bain Capital Ventures, whose partner Sarah Hinckfuss is named to Bench’s board in 2023. According to a press release. Bench owes another $1.2 million to Canadian VC firm Inovia Capital, whose CEO Adam Schlesinger He was appointed The filings also show him as the last CEO of Bench. Contour Venture Partners, a New York-based VC firm Which led Bench’s $60 million Series C round is valued at about $750,000. California-based Altos Ventures, another investor, is owed $777,000. All of this venture capital-related debt is unsecured, the filings say.

Bench’s other debts include $1.8 million in severance pay for former employees, the documents say. TechCrunch previously reported on this The Bench staff was abruptly let go on December 27 With no notice or interruption of service provided. (Says Bench’s new owner, Employer.com It has rehired a large number of employeesHowever, they told TechCrunch that they are temporarily working on 30-day contracts while Bench irons out its issues.)

Bench owes tens of thousands of dollars in severance pay to former executives as well: CEO Jean-Philippe Dureus, CRO Todd Daum, and CFO Mor Lakritz are all listed in the filings. Lacritz LinkedIn He points out that Bench had about $50 million in annual recurring revenue.

Finally, bankruptcy filings show that Bench owes $4 million in unpaid rent to Canadian real estate agency Morguard, likely for its office. At its peak, Bench employed more than 600 people. In addition to money owed to employees, office space, and about $1.5 million (by our back-end calculations) due to dispersal of would-be creditors, such as SaaS business software providers, the filings don’t show how the rest of the money was spent.

While Bench is making its way through bankruptcy, it is also in the process of being insolvent Being acquired By San Francisco-based HR technology company Employer.com. Although its customers told TechCrunch that as well Employer.com asks them to hand over their data to the employer, or risk losing him.

Gary Levin, head of corporate development at Employer.com, told TechCrunch that the Canadian court is overseeing the Bench’s insolvency proceedings and will oversee the distribution of proceeds to creditors. He stressed that Employer.com has a strong balance sheet that allows it to invest in Bench significantly moving forward.