Nikkei Business Daily February 20, 2018

Just Add Machine Learning

Joanna Drake
General Parner, Core Ventures Group

Machine learning applications outside of traditional tech applications to mainstream business functions
are becoming quite exciting.

We’re seeing a continued shift away from what are traditionally high volume but low skill and complexity workforce efforts towards employing cloud software services and machine learning solutions. When targeting small-medium businesses, startups offering business services often have to
work hard to gather big data sets. Once their data sets reach significant size, however, the startups
can employ machine learning to greatly reduce and even eliminate human work. Ultimately this can
represent huge advantages with lower costs and higher quality for customers., a Core Ventures Group portfolio company, is a good example of this larger trend. The
company was founded in New York City in 2012, and moved its headquarters to Vancouver in 2013. It
began by employing task-specific algorithms paired with real, human bookkeepers to automate
accounting tasks. In just five years, Bench has scaled to be the largest bookkeeping service in the
world, automating over 60% of the bookkeeping process to allow its bookkeepers to perform their work
5 times faster than a traditional solution, without sacrificing service or accuracy. A pioneer in machine
learning applications, Bench recently implemented a deep learning platform to accelerate its growth
and efficiency gains.

Bench recently closed a significant equity financing round with high credibility venture investors like
Bain Capital and is now accelerating growth in the U.S. and Canadian markets. There is potential for
other international markets, especially those advanced economies where the workforce is aging and
it’s harder to staff work with low-level professionals.

We asked Ian Crosby, Founder and CEO, to recount the Bench creation story and speak to similar
market opportunities:

Q) What inspired you to take on bookkeeping as a service?

A) I saw the opportunity when I was hired as a bookkeeper while in University. It made no sense that
someone like me, with little to no bookkeeping experience, was the best option. How was there no way
for small business owners to just plug in a credit card, and have their books done for them?

This was the spark for the idea behind Bench: we wanted to make bookkeeping simple, effortless, and
affordable for small business owners. The answer was a combination of simple cloud software service
powered by a team of world-class professional bookkeepers to automate accounting tasks and give
small business owners a hands-off bookkeeping experience.

Q) Who are your core customers? How have they changed over time?

A) Independent professionals and small businesses with between $50k and $5M in annual revenue.
They’re big enough that they need accurate bookkeeping, but not so big that they are cost insensitive.
This is the perfect fit for a new service like ours – one that uses new technology to provide great
service at low cost.

Q) What percentage of your solution is human directed vs. machine? How has that evolved?

A) We don’t think of it as replacing humans with machines, we think of it as amplifying human effort. By
removing the manual bookkeeping processes, we gain the opportunity to add more personalized
services which, in turn, result in a better overall experience for our customers. Comparatively, we
actually spend more time on some of these elements. Which makes sense when each customer is
more profitable because costs have decreased – you want to spend more time working on retaining
those clients.

Q) What are your international expansion plans?

A) Our initial market was the United States, and the U.S. remains the driver of our growth thus far. We
recently announced our expansion into the Canadian market – a long-time goal for the founding team.
From Canada we plan to expand to additional countries.

Q) What other vertical service offerings do you think are ripe for similar cloud software services and
machine learning solutions?

A) It’s hard to think of a business services industry that isn’t ripe for machine learning in some way.
Certainly small business legal services, tax services, even basic marketing services in some cases.
Machine learning is just hitting its stride and will have wide-ranging effects across industries, much like
the shift to mobile devices and cloud hosting services have redefined the standards of business over
the past two decades.

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If you want to contact us

We place a high priority on meeting with start-ups that are referred by someone we know. If you aren’t already connected to our network, feel free to send us an email. Forgive us in advance for only responding to cold introductions that are absolutely fascinating.