Italian Tech Powerhouse Bending Spoons Bets on “Hold Forever” Strategy
Italian tech company Bending Spoons recently captured global attention with a whirlwind series of announcements. Within just 48 hours, the company revealed the acquisition of AOL alongside a massive $270 million funding round, catapulting its valuation from $2.55 billion in early 2024 to $11 billion.
The company’s rapid growth has been fueled by acquiring dormant tech brands such as Evernote, Meetup, and Vimeo, then transforming them into profitable ventures through aggressive cost-cutting and strategic price adjustments. Unlike traditional private equity players, however, Bending Spoons intends to retain ownership indefinitely, foregoing sales or exits.
The Rise of “Venture Zombies”
Andrew Dumont, founder and CEO of Curious, a firm specialising in reviving what he calls “venture zombies,” believes this “buy, fix, and hold” approach will gain traction in the coming years, especially as AI-driven startups make older VC-backed software firms less competitive.
“Our belief is that the venture power law, in which 80% of companies ‘fail,’ produces many great businesses, even if they’re not unicorns,” Dumont told TechCrunch.
For Dumont, a “great business” is one that can be acquired at a low price and quickly revitalised to generate substantial cash flow. His strategy mirrors that of long-standing players such as Constellation Software, while newer firms like Tiny, SaaS.group, Arising Ventures, Calm Capital, and Bending Spoons are following suit.
“Our whole model is to buy these companies, make them profitable, and use those earnings to grow the business,” Dumont explained.
Curious’ Growing Footprint
In 2023, Curious raised $16 million in dedicated capital to acquire software firms that have stalled and can no longer secure follow-on investment. Since then, the firm has acquired five companies, including UserVoice, a 17-year-old startup previously backed with $9 million in VC funding from Betaworks and SV Angel.
“It’s a great business, but the cap table wasn’t aligned with keeping it. These funds get old, and these companies just sit there,” Dumont said.
“We provide liquidity and also reset these companies for profitability.”
Although Dumont declined to disclose the purchase price for UserVoice, he noted that “venture zombies” often sell at a fraction of the multiples commanded by healthy SaaS startups, which typically trade at 4x annual revenue. Dumont estimates that these stagnating companies sometimes sell for as low as 1x yearly revenue.
Turning Stagnation into Profit
Curious applies cost-cutting and price increases to immediately push acquired companies to 20–30% profit margins.
“If you have a million-dollar business, you’re kicking off $300,000 in earnings,” Dumont explained.
The firm centralises functions like sales, marketing, finance, and administrative roles across all portfolio companies, allowing sustainable growth without relying on VC-scale exits.
“We’re not trying to sell the businesses we acquire and don’t need VC-scale exits, so we can balance growth and profitability more sustainably,” Dumont said.
When asked why traditional VCs do not prioritise profitability in the same way, Dumont observed:
“Investors don’t care about earnings; they only care about growth. Without it, there’s no VC-scale exit, so there’s no incentive to operate with that level of profitability.”
Expanding the Model
The profits generated from Curious’ portfolio are reinvested to acquire additional startups. The firm aims to purchase 50 to 75 companies like UserVoice over the next five years, focusing on software businesses generating $1 million to $5 million in recurring revenue—a segment historically overlooked by private equity and secondary investors.
“We’ve been doing this for a little under two years now, and we’ve probably looked at at least 500 companies, and we bought five,” Dumont said.
Despite Bending Spoons’ valuation surge providing validation for the venture zombie acquisition strategy, Dumont expects limited competition.
“Turning profits out of stagnation isn’t easy. It’s a ton of work,” he added.
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