TL;DR
Khosla Ventures has invested $10 million in Ian Crosby’s new venture, Synthetic, which aims to develop a fully autonomous AI bookkeeper. Crosby’s previous startup, Bench, collapsed in 2024, but investors see potential in his new approach despite technical uncertainties.
Khosla Ventures has invested $10 million in Ian Crosby’s new startup, Synthetic, which aims to develop a fully autonomous AI-driven bookkeeping system. The funding highlights investor confidence despite Crosby’s previous startup, Bench, collapsing in 2024, and the technical challenges involved.
The seed round was led by Khosla Ventures, with participation from Basis Set Ventures and Shopify CEO Tobias Lütke. Crosby’s new company, Synthetic, is still in the design phase, with a focus on automating bookkeeping processes for startups entirely through AI. Crosby admits that current foundational models may not yet fully support his vision, comparing the technology’s development to a self-driving car that can operate in limited conditions. Despite past difficulties with Bench, Crosby has received support from investors who see growth potential, citing his roles at Shopify and Teal as evidence of learning from past mistakes. Khosla partner Jon Chu explained that his firm sometimes invests in controversial or risky ventures, citing the example of Parker Conrad’s journey from Zenefits to Rippling. Crosby emphasizes that Synthetic will not release non-autonomous products and is willing to wait for AI models to improve, as he has secured funding to sustain long-term development.
Why It Matters
This investment underscores a broader trend of venture capital firms backing ambitious AI-driven automation startups, even when founders have experienced previous failures. It highlights confidence in Crosby’s resilience and the potential for fully autonomous bookkeeping to transform the accounting industry, especially for startups that rely heavily on automated financial management. The development could influence how financial services are delivered in the future, but technical hurdles remain significant.
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Background
Ian Crosby’s last startup, Bench, was a prominent online accounting service that imploded in 2024 after internal challenges and strategic disagreements, despite being acquired by a larger firm in 2021. Crosby’s departure from Bench followed disagreements over the company’s direction and financial issues. Since then, Crosby has taken roles at Shopify and founded Teal, which was acquired by Mercury. His new venture, Synthetic, aims to push the boundaries of AI in financial automation, an area that has seen increasing investment but still faces technical and reliability challenges. The recent funding round signals that some investors remain optimistic about Crosby’s vision despite the setbacks of his previous startup.
“I tend to run towards controversy a little bit. In controversy, groupthink often shapes the narrative rather than the truth of the story itself.”
— Jon Chu, Khosla Ventures partner
“We’re not going to release anything that’s not fully autonomous. It’s that or bust.”
— Ian Crosby, founder of Synthetic
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What Remains Unclear
It remains unclear how effectively Synthetic’s AI system will scale beyond a narrow user base, given current limitations in foundational models. The company’s technology is still in development, and there is uncertainty about its ability to reliably perform complex bookkeeping tasks at scale.
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What’s Next
Synthetic plans to continue refining its prototype, testing with early users, and gradually expanding its capabilities. The company may seek additional funding as it moves toward beta releases and aims to demonstrate the AI’s reliability in broader applications.
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Key Questions
What is Synthetic’s main goal?
Synthetic aims to create a fully autonomous AI system capable of handling bookkeeping and financial reporting without human intervention, targeting startup clients.
Why did Khosla Ventures invest despite Crosby’s previous startup collapsing?
According to Khosla partner Jon Chu, the firm sees potential in Crosby’s learning curve and believes that ambitious, controversial projects can lead to significant innovation and growth.
What challenges does Synthetic face?
The primary challenge is the current technological limitation of foundational AI models to accurately perform complex bookkeeping tasks, which may hinder scalability and reliability.
What is Crosby’s background?
Ian Crosby previously founded Bench, which collapsed in 2024, and later worked at Shopify and founded Teal, which was acquired by Mercury. He is now focused on AI automation in finance.
