MILAN / LONDON (IT BOLTWISE) – Italian company Bending Spoons recently made waves with its acquisition of AOL and a massive capital increase of $270 million. These moves quadrupled the company’s value to $11 billion. Bending Spoons follows a unique strategy by acquiring stagnant tech brands and turning them profitable by cutting costs and increasing prices. However, unlike traditional private equity firms, Bending Spoons has no plans to resell these companies.
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Italian company Bending Spoons recently made waves with its acquisition of AOL and a massive capital increase of $270 million. These moves quadrupled the company’s value to $11 billion. Bending Spoons follows a unique strategy by acquiring stagnant tech brands and turning them profitable by cutting costs and increasing prices. However, unlike traditional private equity firms, Bending Spoons has no plans to resell these companies.
Andrew Dumont, founder and CEO of Curious, a company that also acquires and revitalizes so-called ‘venture zombies’, believes this ‘hold forever’ strategy will become more important in the coming years. This is because AI-native startups are making older, venture capital-backed software companies increasingly irrelevant. Dumont defines a “great business” as one that can be purchased at a low price and quickly revived to generate significant cash flows.
Curious raised $16 million in capital in 2023 to buy software companies that have stalled and can no longer obtain follow-on financing. Since then, the company has completed five deals, including the purchase of UserVoice, a 17-year-old startup that had received $9 million in VC funding. Dumont explains that stagnant companies often sell for a fraction of the value achieved by healthy SaaS startups, which typically make four times their annual revenue or more.
By implementing cost reductions and price increases, Curious can bring these companies to profit margins of 20% to 30% almost immediately. These restructurings are possible because Curious can centralize key functions such as sales, marketing, finance and other administrative functions across all portfolio companies. Dumont emphasizes that they do not try to sell the acquired companies and therefore do not rely on VC-sized exits, allowing for a more sustainable balance between growth and profitability.
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