TL;DR
Khosla Ventures has invested $10 million in Ian Crosby’s new startup, Synthetic, which seeks to develop fully autonomous AI bookkeeping. Crosby’s previous startup, Bench, collapsed in 2024. The investment signals confidence in Crosby’s vision despite past setbacks.
Khosla Ventures has invested $10 million in Ian Crosby’s new startup, Synthetic, which aims to develop a fully autonomous AI-driven bookkeeping service targeted at startups. This marks a significant vote of confidence in Crosby’s new venture despite the collapse of his previous company, Bench, in 2024.
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The seed funding round was led by Khosla Ventures, with participation from Basis Set Ventures and Shopify CEO Tobias Lütke. Crosby’s new startup, Synthetic, is still in the design phase, aiming to create an AI system capable of generating accrual-based financials without human input. Crosby admits that current foundational models may not yet support this fully autonomous vision, but he remains committed to the goal.
Despite the failure of Bench, Crosby’s previous accounting startup, Khosla partner Jon Chu expressed confidence, citing Crosby’s post-Bench roles at Shopify and Teal as evidence of his growth and resilience. Chu stated, “I believe people have room for growth,” and noted that Crosby’s recent experiences have provided him with valuable lessons. Crosby was not responsible for Bench’s collapse, according to his account, and was fired in 2021 after turning down a $250 million acquisition offer from Brex, amid disagreements with the board over strategic direction.
Why It Matters
This investment highlights a willingness among leading venture capitalists to back entrepreneurs with troubled pasts, based on their potential for future success. It underscores the growing interest in AI automation for financial services, a sector ripe for disruption. For readers, this signals that despite setbacks, innovative entrepreneurs like Crosby remain attractive investment targets, especially when backed by prominent firms like Khosla Ventures.
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Background
Ian Crosby’s previous startup, Bench, was a prominent online accounting platform that imploded in 2024 after financial difficulties. Crosby was fired in 2021, shortly after rejecting a substantial acquisition offer, amid disagreements with the board. Following Bench, Crosby joined Shopify and founded Teal, which was acquired by Mercury. His new venture, Synthetic, aims to leverage advancements in AI to automate bookkeeping entirely, a goal that most current solutions do not fully achieve. The funding round reflects ongoing investor interest in AI-driven fintech innovations despite technical challenges.
“I tend to run towards controversy a little bit.”
— Jon Chu, Khosla Ventures partner
“We’re not going to release anything that’s not fully autonomous. It’s that or bust.”
— Ian Crosby
What Remains Unclear
It remains unclear whether Synthetic’s current prototype can scale beyond a narrow user base or if foundational AI models will become sufficiently reliable for broad commercial use. Crosby acknowledges that AI models still make significant bookkeeping errors, and the company’s ability to achieve full autonomy at scale is uncertain.
What’s Next
Synthetic plans to continue refining its prototype and will likely seek additional funding to expand testing and development. The company may also aim to demonstrate its AI system’s capabilities in real-world scenarios to attract further investment and potential clients.
Key Questions
What is Synthetic’s main goal?
Synthetic aims to develop a fully autonomous AI system capable of handling bookkeeping tasks without human intervention, targeting startups and tech companies.
Why did Khosla Ventures invest despite Crosby’s previous startup failure?
Khosla partner Jon Chu expressed confidence in Crosby’s growth and believed that his lessons learned from past experiences make him a promising founder for this ambitious project.
What challenges does Synthetic face?
The main challenge is ensuring the AI’s accuracy and reliability at scale, as current models still make significant errors in bookkeeping calculations.
Will Crosby’s new startup succeed where Bench failed?
Success depends on technological advancements in AI and how well Synthetic can demonstrate reliable, scalable automation in financial tasks.
What are the next steps for Synthetic?
The company will likely focus on refining its prototype, expanding testing, and seeking additional funding to develop a fully autonomous system.
