{"id":319321,"date":"2025-11-28T21:18:12","date_gmt":"2025-11-28T21:18:12","guid":{"rendered":"https:\/\/www.newsbeep.com\/us\/319321\/"},"modified":"2025-11-28T21:18:12","modified_gmt":"2025-11-28T21:18:12","slug":"why-hold-forever-investors-are-snapping-up-venture-capital-zombies","status":"publish","type":"post","link":"https:\/\/www.newsbeep.com\/us\/319321\/","title":{"rendered":"Why ‘hold forever’ investors are snapping up venture capital ‘zombies’"},"content":{"rendered":"

Italian company Bending Spoons flew largely under the radar \u2014 until last month. In a span of 48 hours, the company announced the acquisition of AOL<\/a> and a massive $270 million raise, quadrupling its valuation to $11 billion<\/a>, up from $2.55 billion set in early 2024.<\/p>\n

Bending Spoons has grown rapidly by acquiring stagnating tech brands like Evernote, Meetup, and Vimeo, then turning them profitable through aggressive cost-cutting and price increases. While the company\u2019s approach is similar to private equity, there is one key difference: Bending Spoons has no plans to sell these businesses.<\/p>\n

Andrew Dumont, the founder and CEO of Curious<\/a>, a firm that also acquires and revitalizes what he calls \u201cventure zombies,\u201d is convinced this \u201chold forever\u201d strategy will become increasingly prominent in the coming years as AI-native startups make older VC-backed software businesses less relevant.<\/p>\n

\u201cOur belief is that the venture power law, in which 80% of companies \u2018fail,\u2019 produces many great businesses, even if they\u2019re not unicorns,\u201d Dumont told TechCrunch. \u00a0<\/p>\n

Dumont defines a \u201cgreat business\u201d as one that can be purchased at a low price and quickly revived to generate substantial cash flows. This \u201cbuy, fix, and hold\u201d strategy is the playbook for a growing number of investors, from the 30-year-old Constellation Software, which pioneered the model, to newer players, including Bending Spoons, Tiny<\/a>,\u00a0SaaS.group<\/a>,\u00a0Arising Ventures<\/a>,\u00a0and Calm Capital<\/a>, according to Dumont.<\/p>\n

\u201cOur whole model is to buy these companies, make them profitable, and use those earnings to grow the business,\u201d Dumont said.<\/p>\n

In 2023, Curious raised $16 million in dedicated capital for buying software companies that have stalled and can no longer secure follow-on investment.<\/p>\n

Techcrunch event<\/p>\n

\n\t\t\t\t\t\t\t\t\tSan Francisco
\n\t\t\t\t\t\t\t\t\t\t\t\t\t|
\n\t\t\t\t\t\t\t\t\t\t\t\t\tOctober 13-15, 2026\n\t\t\t\t\t\t\t<\/p>\n

Since then, the firm has bought five businesses, including UserVoice, a 17-year-old startup that raised $9 million<\/a> in VC funding from Betaworks and SV Angel.<\/p>\n

\u201cIt\u2019s a great business, but the cap table wasn\u2019t aligned with keeping it. These funds get old, and these companies just sit there,\u201d Dumont said. \u201cWe provide liquidity and also reset these companies for profitability.\u201d<\/p>\n

Although Dumont didn\u2019t disclose how much he paid for UserVoice, he said that stagnant companies sell for a fraction of the valuation commanded by healthy SaaS startups, which typically sell for 4x annual revenue or more. Based on our conversation, we estimate that \u201cventure zombies\u201d sometimes sell for as low as 1x yearly revenue.<\/p>\n

By implementing cost-cutting and price increases, Curious can push these businesses to achieve 20% to 30% profit margins almost immediately. \u201cIf you have a million-dollar business, you\u2019re kicking off $300,000 in earnings,\u201d he offered as an example. <\/p>\n

They achieve the turnarounds because, unlike the stand-alone companies, they can centralize functions like sales, marketing, finance, and other admin roles, across all of their portfolio companies. \u201cWe\u2019re not trying to sell the businesses we acquire and don\u2019t need VC-scale exits, so we can balance growth and profitability more sustainably,\u201d Dumont said.<\/p>\n

When asked why VCs don\u2019t urge their startups to be profitable like Curious does, Dumont responded by saying: \u201cInvestors don\u2019t care about earnings; they only care about growth. Without it, there\u2019s no VC-scale exit, so there\u2019s no incentive to operate with that level of profitability.\u201d<\/p>\n

The cash generated from Curious\u2019 companies is then used to buy other startups, Dumont said. \u00a0<\/p>\n

The firm plans to buy 50 to 75 startups like UserVoice over the next five years, and Dumont is certain he won\u2019t have a shortage of targets to choose from. Curious is focused on acquiring startups that generate $1 million to $5 million in recurring revenue annually, a segment of the software market that, according to Dumont, private equity shops and secondary investors have historically ignored.<\/p>\n

\u201cWe\u2019ve been doing this for a little under two years now, and we\u2019ve probably looked at at least 500 companies, and we bought five,\u201d Dumont said.<\/p>\n

While Bending Spoons\u2019 big valuation hike may validate the \u201cventure zombie\u201d acquisition model, Dumont doesn\u2019t expect a lot of new competition. Turning profits out of stagnation isn\u2019t easy. \u201cIt\u2019s a ton of work,\u201d he said.<\/p>\n","protected":false},"excerpt":{"rendered":"Italian company Bending Spoons flew largely under the radar \u2014 until last month. In a span of 48…\n","protected":false},"author":2,"featured_media":319322,"comment_status":"","ping_status":"","sticky":false,"template":"","format":"standard","meta":{"footnotes":""},"categories":[40],"tags":[139954,28,158,3201,163543],"class_list":{"0":"post-319321","1":"post","2":"type-post","3":"status-publish","4":"format-standard","5":"has-post-thumbnail","7":"category-entrepreneurship","8":"tag-bending-spoons","9":"tag-business","10":"tag-entrepreneurship","11":"tag-private-equity","12":"tag-uservoice"},"_links":{"self":[{"href":"https:\/\/www.newsbeep.com\/us\/wp-json\/wp\/v2\/posts\/319321","targetHints":{"allow":["GET"]}}],"collection":[{"href":"https:\/\/www.newsbeep.com\/us\/wp-json\/wp\/v2\/posts"}],"about":[{"href":"https:\/\/www.newsbeep.com\/us\/wp-json\/wp\/v2\/types\/post"}],"author":[{"embeddable":true,"href":"https:\/\/www.newsbeep.com\/us\/wp-json\/wp\/v2\/users\/2"}],"replies":[{"embeddable":true,"href":"https:\/\/www.newsbeep.com\/us\/wp-json\/wp\/v2\/comments?post=319321"}],"version-history":[{"count":0,"href":"https:\/\/www.newsbeep.com\/us\/wp-json\/wp\/v2\/posts\/319321\/revisions"}],"wp:featuredmedia":[{"embeddable":true,"href":"https:\/\/www.newsbeep.com\/us\/wp-json\/wp\/v2\/media\/319322"}],"wp:attachment":[{"href":"https:\/\/www.newsbeep.com\/us\/wp-json\/wp\/v2\/media?parent=319321"}],"wp:term":[{"taxonomy":"category","embeddable":true,"href":"https:\/\/www.newsbeep.com\/us\/wp-json\/wp\/v2\/categories?post=319321"},{"taxonomy":"post_tag","embeddable":true,"href":"https:\/\/www.newsbeep.com\/us\/wp-json\/wp\/v2\/tags?post=319321"}],"curies":[{"name":"wp","href":"https:\/\/api.w.org\/{rel}","templated":true}]}}