Earlier this year, shares of traditional SaaS companies fell amid investor fears that AI-powered software could eventually displace those businesses. Despite those concerns, Bending Spoons, a company that acquires and revives stagnant but well-known technology companies, saw its shares rise in its market debut.
It closed at $40.50 on Wednesday, nearly 40% above its IPO price of $29. 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.
Bending Spoons has grown rapidly by acquiring legacy, but once popular, brands like AOL, Eventbrite, Evernote, Meetup, and Vimeo, then turning them profitable, usually by aggressively cutting costs, launching new features, and raising prices. While the company’s approach is similar to private equity, there is one key difference: Bending Spoons does not plan to sell these businesses.
The company’s released financials show that it has indeed turned its growing portfolio of assets into a profit. Bending Spoons reported revenue of $601 million for the first quarter, generating $27.4 million in net income. That’s a significant rebound from the same period last year, when the company reported a net loss of $112 million on revenue of $259 million, according to the SEC filing.
Bending Spoons, whose name comes from a scene in the sci-fi movie “The Matrix,” generated most of its revenue from subscriptions, which accounted for 84 percent of its business last year.
Prior to the offering, Baillie Gifford was Bending Spoons’ largest outside shareholder, followed by smaller stakes from buyout funds Renaissance Partners, Cox Enterprises, Durable Capital Partners, Fidelity and T. Rowe Price.
The IPO also represents a significant windfall for Bending Spoons’ five co-founders: Luca Ferrari, Francesco Patarnello, Matteo Danieli, Luca Querella and Tomasz Greber.
In addition to Bending Spoons, other investors pursue the strategy of acquiring, fixing, and holding on to defunct software companies, often referred to as “zombie businesses.” These companies include Constellation Software, Curious, Microscopic, saas.team, Arising Venturesand Calm capital.
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