Jake Benson and the unfinished business of Bitcoin

Jake Benson’s business began with the sort of question that can make a promising investment feel like an administrative error. He had started investing in cryptocurrency in 2013. Then he tried to work out how to report the capital gains. The investment was new; the obligation to account for it was familiar. Finding software that could bring the two together proved rather less straightforward.

He could have treated the difficulty as an annual nuisance. Instead, in 2014, he founded Libra. Its early product, LibraTax, addressed the records that digital currency users needed for tax reporting. Among the possible ways to enter the crypto business, helping people finish their paperwork had a particular charm: the customer already knew something was wrong.

That choice is the useful starting point for understanding Benson. His public career follows the work left behind by a transaction. Once the asset has moved and the excitement has subsided, someone needs an account of what happened. His company pursued that someone, from the individual investor to the institutional operator, through a change of customers, a change of city and eventually a change of name.

A personal return, an enterprise problem

Before Libra, Benson worked at Capgemini, implementing SAP for Fortune 500 clients. His experience included industries such as aerospace, oil and gas, manufacturing and supply chains. These were businesses with existing operations, established responsibilities and people who needed software to fit the way work actually happened. Distributed development teams were already part of his working life.

The earlier chapter was at the University of Texas at Austin, where he earned a business degree with honors. His education record includes a psychology minor, undergraduate research work for statistics professor James Scott and the university cycling team. It is a pleasingly varied set of entries: people, numbers and a bicycle, all appearing before the crypto company.

The SAP background gives his founding decision some context. Enterprise software involves the patient business of connecting systems and making information useful to their operators. A transaction may exist perfectly well in one place while remaining awkward to understand somewhere else. The business opportunity appears in that distance. Benson had worked on large companies’ systems before confronting his own much smaller reporting problem.

“Out of personal need”

Jake Benson on the origin of Libra, 2018

LibraTax launched in August 2014. Benson’s explanation of the origin was direct: investing had led him to a question about reporting, and he had found no good answer. The company gave him a way to pursue the question beyond his own return. What began as one investor’s difficulty could become a recurring task for other people using the same assets.

There is a modesty to that starting point which makes the later expansion easier to understand. The initial problem was specific enough to describe without a grand prediction about finance. People were transacting in digital currencies. They needed usable records. Benson started with the work in front of them, leaving room for the customer to become more complicated.

The customer moves east

As Libra developed, Benson brought in people whose careers ran through established financial institutions and professional services. In 2016, Jeremy Drane joined as chief commercial officer from PwC, where he had established its distributed ledger practice. Other additions included Dave Albert from BNY Mellon and Deepak Rao from Visa. Their experience described the kind of business Libra wanted to serve.

The company’s enterprise platform was designed for users including auditors, regulators, risk officers and tax professionals. It connected blockchain and other business data and gave people ways to interact with the combined information. This was already a broader brief than a calculator for an individual investor. The person responsible for the result might have no interest in the machinery producing it.

Then the company moved. In January 2017, Libra relocated from San Francisco to New York. Benson explained the decision through proximity to current and future customers in financial markets. An address is a wonderfully literal expression of a sales strategy. If the people who need the software are concentrated in one city, there is a case for being within conversational distance.

In November 2017, Libra launched Crypto Office for institutional customers, including crypto funds, market makers and exchanges. XBTO and ShapeShift were early clients. Discussions with people in tax, compliance and risk had helped shape the product. The difficulty they described was growing complexity: processes that became harder to manage as the activity expanded.

Benson connected the problem to institutions’ willingness to invest. Without suitable systems and processes, he said, they were reluctant to allocate significant money to the industry. That observation gave accounting software a role beyond tidying up afterward. The ability to produce usable information could influence whether an institution felt prepared to participate at all.

Libra also announced a $7.8 million Series A in 2017, with participants including Liberty City Ventures, XBTO, Boost VC and Lee Linden. In 2018, it announced a $15 million Series B. Benson said that round involved returning investors and brought total funding to $24.8 million. The earlier personal problem now supported an organization with institutional customers and institutional funding.

His connections also extended into the accounting classroom. In November 2017, Benson and Libra’s Rod Brennan were scheduled together for an “Auditing Blockchain” session at Rutgers. It is an apt pairing for the business he was building: a founder bringing new transaction systems into a conversation with people whose job was to examine whether the resulting information could be trusted.

An accountant enters the naming meeting

By March 2019, Libra had become Lukka. The new name referenced Luca Pacioli, the Franciscan friar associated with popularizing double-entry bookkeeping. A crypto company could have chosen something suggesting speed, space or a slightly threatening animal. This one reached into the history of accounting. The choice supplied its own little commentary on what the business considered useful.

Benson wanted the change to draw attention to data. Libra had become associated with tax and software; he wanted customers to think more broadly about a software and data business serving crypto. The rebrand accompanied the formal launch of Lukka Reference Data, which had been tested with selected clients during 2018.

“We wanted to give a little attention to our focus on data”

Jake Benson, March 2019

Reference data concerns what an asset is, how it is identified and how it appears across the places where people trade it. Lukka’s offering then covered more than 2,700 crypto assets. Benson described listings that changed and unfamiliar assets that required review. Even a recognizable ticker could need checking. A short symbol is a convenient label; it still needs someone to establish what it represents.

The change gave the founding story a wider frame. A personal tax calculation needs trustworthy inputs. Institutional accounting needs them too, across more assets and more activity. Data products extended the company’s attention upstream, toward the material from which the calculations and reports would be made. Pacioli’s name sat comfortably above that continuing concern with the record.

Benson’s ambition remained tied to the interface with existing business practices. In 2019, as Lukka released a report on institutional crypto processing, he described helping institutions work with the evolving asset ecosystem and using that understanding to expand products and partnerships. The intended destination was practical: a financial organization able to use the information its crypto activity created.

Back to the kitchen table

The individual investor eventually returned to the center of the product story. In December 2019, Lukka announced LukkaTax, a service for people preparing their own crypto tax information. Benson described it as drawing on the infrastructure behind the company’s institutional solutions. The business had traveled toward larger customers, then brought some of that work back to the person with a return to complete.

A CPA.com alliance connected Lukka with professional accountants as well. For Benson, that meant serving both people doing the work themselves and practitioners helping clients. The original problem had persisted through the company’s expansion. A different scale of software could now be applied to the same basic task of making transaction records usable.

In January 2020, Lukka announced SOC 1 Type 2 and SOC 2 Type 2 attestation reports, following testing periods in 2019. Such reports belong to the less theatrical side of selling financial software: controls, procedures and independent examination. Benson was still founder and CEO. The company he had started around his own reporting difficulty was answering the questions that institutional buyers and their auditors asked of vendors.

Benson left Lukka in June 2020. His founding chapter therefore has a clear boundary: the original reporting tool, the institutional expansion, the New York move, the data products and the return to retail users all sit within that period. The business continued beyond his tenure, but those years show the particular problem he chose and how far he followed it.

There is a neat ending in the fact that the individual investor came back. Benson began by trying to account for his own crypto activity. He built a company that worked its way through increasingly demanding versions of that task. The asset could be unfamiliar, the customer could become larger, and the company could acquire a Renaissance name. Someone still had to finish the books.