Earlier this year, shares of traditional SaaS companies tumbled amid investor fears that AI-powered software could eventually crowd out those businesses. Despite such concerns, Bending Spoons, a company that buys and revives established tech firms in the doldrums, saw its stock soar in its market debut.
It closed at $40.50, about 40% higher than its IPO price of $29 on Wednesday. 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 value of $11 billion. The company raised $1.68 billion in its offering.
Bending Spoons has grown rapidly by acquiring legacy but once-popular brands like AOL, Eventbrite, Evernote, Meetup and Vimeo, then making them profitable by typically aggressive cost-cutting, rolling out new features and raising prices. While the company’s approach is similar to private equity, there is one key difference: Bending Spoons has no plans to sell these businesses.
The company’s disclosed financials show that it has indeed turned its growing asset portfolio into profitability. Bending Spoons reported net income of $27.4 million on revenue of $601 million for the 1st quarter. That’s a significant turnaround from the same period last year, when the company posted a net loss of $112 million on revenue of $259 million. SEC filing.
Bending Spoons, whose name comes from a scene in the sci-fi movie The Matrix, made the bulk of its revenue from subscriptions, which accounted for 84% of its business last year.
Before the offering, Baillie Gifford was the largest outside shareholder in Bending Spoons, after which Renaissance Partners, Cox Enterprises, Sustainable Capital Partners, Fidelity and buyout fund T. Rowe Price took smaller stakes.
The IPO also represents a significant gain for the five co-founders of Bending Spoons: Luca Ferrari, Francesco Patarnello, Matteo Danieli, Luca Querella and Tomasz Greber.
Aside from bending spoons, other investors often follow the strategy of acquiring, fixing and holding so-called discontinued software firms. “venture zombie” companies. These firms include Constellation Software, It is interesting, Small, SaaS.group, Emerging Enterprisesand Quiet Capital.
When you purchase through links in our articles, we may earn a small commission. This does not affect our editorial independence.
