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Bending Spoons defies SaaS slump, surges 40% on first day of trading
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Bending Spoons, the Milan-based company that acquires and revitalizes aging tech brands, saw its shares surge nearly 40% on its first day of trading on Wednesday, defying a broader slump in software-as-a-service (SaaS) stocks. The company closed at $40.50, well above its initial public offering (IPO) price of $29, giving it a market capitalization of $25.7 billionāmore than double its last private valuation of $11 billion. The strong debut comes amid investor concerns that AI-powered software could displace traditional SaaS businesses, yet Bending Spoons' unique model appears to have resonated with the market.
The 13-year-old company has grown rapidly by acquiring once-popular but stagnating brands such as AOL, Eventbrite, Evernote, Meetup, and Vimeo. Its strategy involves aggressive cost-cutting, launching new features, and raising prices to turn these assets profitable. Unlike private equity firms, Bending Spoons has no plans to sell the businesses it acquires, instead holding them long-term.
Bending Spoons' disclosed financials reveal a significant turnaround. For the first quarter of this year, it reported $601 million in revenue and $27.4 million in net income, compared to a $112 million net loss on $259 million in revenue during the same period last year, according to its SEC filing. Subscriptions accounted for 84% of its business in 2023. The IPO raised $1.68 billion.
The company's success highlights a growing trend of acquiring and fixing 'venture zombie' companiesāstalled software firms that are no longer growing but have valuable intellectual property or user bases. Other firms following a similar strategy include Constellation Software, Curious, Tiny, saas.group, Arising Ventures, and Calm Capital. Bending Spoons' strong debut suggests that investors are willing to bet on this model despite broader market uncertainties.
Before the offering, Baillie Gifford was Bending Spoons' largest outside shareholder, followed by stakes from Renaissance Partners, Cox Enterprises, Durable Capital Partners, Fidelity, and T. Rowe Price. The IPO also represents a significant windfall for the company's five co-founders: Luca Ferrari, Francesco Patarnello, Matteo Danieli, Luca Querella, and Tomasz Greber.
Looking ahead, Bending Spoons' ability to continue turning around acquired brands will be key to sustaining its growth. The company's name, inspired by a scene in 'The Matrix,' reflects its mission to bend the rules of traditional software business models. With the IPO's success, more investors may seek out similar opportunities in the venture zombie space, potentially reshaping the SaaS landscape.
