Khosla Ventures Stakes $10M on Ian Crosby’s AI Bookkeeping Startup Synthetic

Ian Crosby, the visionary behind the once-promising but ultimately failed startup Bench Accounting, is making a bold comeback. With a fresh $10 million seed funding round led by Khosla Ventures and other notable investors like Basis Set Ventures and Shopify CEO Tobias Lütke, Crosby aims to revolutionize bookkeeping through an entirely autonomous AI system called Synthetic.

While the idea of a fully automated bookkeeper might seem far-fetched, Crosby is undeterred. 'We’re not going to release anything that’s not fully autonomous,' he told TechCrunch. 'It’s that or bust.' The startup's goal is to generate accrual-based financials without any direct human involvement, setting it apart from current market players like Xero.

Despite the challenges of his past, Crosby maintains a positive outlook. He was fired by Bench's board in 2021 after turning down a $250 million acquisition offer and facing disagreements over strategic direction. However, Khosla Ventures partner Jon Chu believes in Crosby’s potential, saying, 'I tend to run towards controversy a little bit.' Chu cited Parker Conrad’s rise from Zenefits to Rippling as an example of growth through adversity.

Chu spoke highly of Crosby's post-Bench ventures, including his time at Shopify and the founding of Teal. Crosby himself acknowledges that AI models still struggle with bookkeeping errors but remains confident in Synthetic's long-term potential. 'We haven’t driven down enough streets to know if it’s going to crash,' he said, referring to the need for extensive testing before full-scale deployment.

While Synthetic plans to serve only AI and software startups initially, Crosby is optimistic about scaling the service. He believes that as foundational models improve, so will the reliability of bookkeeping calculations. For now, the focus remains on perfecting the prototype and ensuring it can handle a wide range of financial tasks autonomously.