Earlier this year, shares of traditional SaaS companies tumbled amid investor fears that software built with AI could eventually displace those businesses. Despite such concerns, Bending Spoons, a company that acquires and revitalizes stagnating but well-known tech firms, saw its shares surge in its market debut. <\/p>\n
It closed at $40.50 on Wednesday, nearly 40% above its $29 IPO price. At that price, the 13-year-old Milan, Italy-based company has a market capitalization of $25.7 billion, more than double its last private valuation of $11 billion. The company raised $1.68 billion in its offering.<\/p>\n
Bending Spoons has grown rapidly by acquiring aging, but once popular, brands like AOL, Eventbrite, Evernote, Meetup, and Vimeo, then turning them profitable, typically through aggressive cost-cutting, launching new features, and raising prices. 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
The company\u2019s disclosed financials show it has indeed turned its growing portfolio of assets profitable. Bending Spoons reported $601 million in revenue for Q1, generating $27.4 million in net income. That\u2019s a significant turnaround from the same period last year, when the company reported a $112 million net loss on $259 million in revenue, according to the SEC filing<\/a>.<\/p>\n Bending Spoons, whose name comes from a scene in the science-fiction movie \u201cThe Matrix,\u201d generated the majority of its revenue from subscriptions, which accounted for 84% of its business last year.<\/p>\n Before the offering, Baillie Gifford was Bending Spoons\u2019 largest outside shareholder, followed by smaller stakes from buyout fund Renaissance Partners, Cox Enterprises, Durable Capital Partners, Fidelity, and T. Rowe Price.<\/p>\n The IPO also represents a significant windfall for Bending Spoons\u2019 five co-founders: Luca Ferrari, Francesco Patarnello, Matteo Danieli, Luca Querella, and Tomasz Greber.<\/p>\n Besides Bending Spoons, other investors follow the strategy of acquiring, fixing, and holding stalled software firms, often referred to as \u201cventure zombie\u201d<\/a> companies. These firms include Constellation Software, Curious<\/a>, Tiny<\/a>, saas.group<\/a>, Arising Ventures<\/a>, and Calm Capital<\/a>.<\/p>\n