Khosla Ventures is betting $10 million on Ian Crosby, whose first startup, Bench, collapsed.

Ian Crosby, whose previous startup Bench Accounting closed its doors in 2024 before being bought out for scraps, is making another attempt at building a business by automating the drudgery of bookkeeping.

His new startup, Artificial, aims to build a completely autonomous, AI-powered accountant that can generate accrual-based financial statements without direct human involvement. Although the product is still in the design phase — and Crosby admits that his vision may not be technologically possible yet — the startup has raised $10 million in a seed funding round led by Khosla Ventures, with participation from Basis Set Ventures and Shopify CEO Tobias Lütke.

Most investors would run away from a founder facing the kind of challenges Crosby faces now — the fallout from the collapse of his previous business and a vision that may exceed the technical feasibility of current founding models. But Khosla’s partner, John Chu, told TechCrunch that sometimes he does just the opposite: “I tend to run into controversy a little bit.”

“In controversy, groupthink often shapes the narrative rather than the truth of the story itself,” he said, citing the 2016 ouster of Parker Conrad from Zenevitz as an example. While Conrad was initially criticized by industry talk, he later founded the company Rippling, which is now valued at about $17 billion.

“I think people have room to grow,” Chu said of his bet on Crosby and Synthetic.

Crosby maintains that he was not directly responsible for bringing Bunch to the point of bankruptcy. According to him, he was dismissed by the Bench board in 2021, three months after rejecting a $250 million takeover offer from Brex. The board also disagreed with Crosby’s strategic direction, especially as the company was hemorrhaging cash, and his executive team was reportedly frustrated with his direct leadership style.

“He took a big swing, made some mistakes. It didn’t go well,” Cho said.

The Bench Company eventually collapsed when its new management proved unable to restore the company to health on its own.

After leaving Bench, Crosby joined Shopify and founded Teal, another accounting startup, which Mercury bought 18 months later.

As part of his due diligence, Chu said he spoke with several executives who worked with Crosby after his departure from Bench, and they all had “great things to say about Ian,” Chu told TechCrunch.

Chu is convinced that the three roles Crosby held after leaving Bench provided the businessman with ample opportunity to learn from his past mistakes.

Crosby says he’s very focused on creating a bookkeeping service that’s entirely AI-driven, rather than relying on human accountants, as most accounting startups like Xero do.

“We won’t release anything that’s not completely independent,” Crosby told TechCrunch. “It’s either this or failure.”

Synthetic plans to serve AI and other software startups only. But Crosby admits that AI models still make big bookkeeping mistakes. While Artificial’s prototype works with a narrow group of users, it’s still unsure how to scale it to a broader customer base.

Crosby explained with an analogy: “It’s like a self-driving car that can drive down one street versus a self-driving car that can drive down any street. We haven’t driven the streets enough to know if it’s going to crash.”

However, the founder says he can be patient and wait until the foundational models become more reliable in his bookkeeping calculations.

“I’ve been collecting cash for years, so we can wait it out,” Crosby said.