Bending Spoons wants to revive software scraps. Investing in Berkshire

When it debuted on Nasdaq in July, Bending spoons was a little-known holding company in Italy that owned older Internet names like AOL, Vimeo, Eventbrite and Evernote.

Less than four months later, the Milan-based company is emerging as a surprising home for former high-flying software startups sidelined by the artificial intelligence boom. Its M&A project received a major boost this week from the most famous holding company on the planet: Berkshire Hathaway.

Berkshire, which Bending Spoons describes as a “long-time inspiration” for its strategy, has now invested more than $900 million in the company, including a $330 million stake disclosed Wednesday. Wall Street loved the deal, sending Bending Spoons shares up 41%, although some of those gains were lost later in the week, leaving the company with a market capitalization of about $30 billion.

“Berkshire’s decision to strengthen its position just months after the IPO and to these levels represents another vote of confidence in the Bending Spoons model from one of the world’s most respected long-term investors,” Mizuho analysts wrote in a report released after the announcement.

The other big news from Bending Spoons this week highlights the other side of the company’s coin: job cuts. In August, Bending Spoons announced the purchase of workflow software provider Airtable for about $1.3 billion, nearly 90% less than the company’s peak valuation of late 2021. Bending Spoons said Monday that Airtable’s “large portion of the pre-acquisition team” would leave with “substantial separation packages.” Layoffs have already been implemented at Evernote, Vimeo, WeTransfer and other portfolio members.

For the tech industry, Bending Spoons’ initiatives represent the latest example of how quickly fortunes are turning in the AI ​​era, as new agents powered by large language models replace software developers and the products they built. With Anthropic And OpenAI Marching toward trillion-dollar valuations, companies are putting higher-value work in their hands at the expense of a host of software-as-a-service names, creating a phenomenon now known as the “SaaSpocalypse.”

Actions of Intuition, HubSpot And Adobe are all down at least 30% this year, and a long list of private SaaS companies that were once venture darlings are now struggling to find capital, with the public market showing no appetite for IPOs. Last month, Bending Spoons agreed to buy collaboration software maker Miro, once valued at $17.5 billion, for $1.36 billion.

“Either you’re a star or you’re nothing,” said Ethan Kurzweil, founder and managing partner of Chemistry VC and veteran software investor. Kurzweil said he uses Airtable and said there are many good SaaS products on the market run by strong teams, “but they’re not at the frontier anymore.”

Bending Spoons was started in 2013 by friends Luca Ferrari, CEO Matteo Danieli and Francesco Patarnello. A mobile app they had created, called Evertale, failed to take off, and they used their remaining $40,000 to create an operating company instead of “products that no one wanted,” according to the IPO prospectus.

Bending Spoons has announced all of its biggest deals in recent years, starting with Evernote in 2022, followed by Brightcove in 2024, and Vimeo, AOL and Eventbrite in 2025.

The company held its IPO on June 30, raising about $1.7 billion at $29 per share, and hit the Nasdaq the next day. The stock closed Friday at $47.07.

Before Bending Spoons’ recent leap into enterprise software, some of the industry’s biggest acquirers over the past decade were private equity giants Thoma Bravo and Vista Equity Partners. These companies aimed to buy what they considered to be undervalued SaaS companies and, through a combination of cost reductions, efficiency improvements and consolidations, turn them into assets that could be sold or taken public at a higher price.

Bending Spoons uses a different playbook. The company is not looking to exit, but rather wants to generate profits from the companies it buys, similar to Warren Buffett’s model. But unlike Berkshire, Bending Spoons focuses on technology and takes a hands-on approach with its own software, operations and personnel decisions.

Nick Mehta, former CEO of cloud software company Gainsight, said private equity firms are now constrained because “they have bloody noses.”

“They paid much higher prices and have so many struggling businesses that it’s difficult for them to make decisions now,” said Mehta, who sold Gainsight to Vista in 2020.

Thoma Bravo and Vista did not respond to interview requests. Bending Spoons told CNBC in a statement that there hasn’t been a bidding war for a target in “several years.”

As the company began moving into SaaS, Mehta said “Bending Spooned” became a verb in Silicon Valley, referring to companies getting scooped up for pennies on the dollar.

“Unfortunately, a lot of my friends are stuck in this game,” Mehta said. “Investors want to get out, but there are no buyers. Everything before ChatGPT is now a legacy.”

Lloyd Walmsley, an analyst at Mizuho, ​​said Bending Spoons’ model is distinct from the old buyout approach.

“I think there aren’t a lot of people doing what these guys are doing in terms of the depth of operations and the willingness to make substantial changes to products,” Walmsley said in an interview. “It’s not typical for traditional private equity firms to make this level of change.”

For customers of businesses purchased by Bending Spoons, sudden price increases may result.

In April 2023, a few months after acquiring Evernote, Bending Spoons increased the price of the annual personal subscription from $70 to $130. The company later changed its offerings, charging $100 for its so-called Starter plan and $250 for “Evernote Advanced,” compared to the $170 it charged for the Professional plan.

“My first reaction was like, ‘Oh man, I guess I need to move to OneNote,'” Walmsley said, referring to from Microsoft note taking app. But he said he remains loyal to Evernote.

“They’re really good at finding those things that provide a lot of value, and the switching costs are very high,” Walmsley said. “The price is not that high compared to the cost of switching.”

Bending Spoons uses profits from its portfolio companies for future growth, the “vast majority” of which comes from closing more deals, Ferrari told CNBC in an interview Thursday.

“There are some opportunities for improvement that we can unlock in the first few years, and then the company will experience the organic growth intrinsic to this market,” Ferrari said.

For Berkshire and its fellow Bending Spoons investors, the bet is not yet proven.

Products must remain attractive enough that customers are willing to pay at a time when AI is squeezing margins in much of the software industry. In its first earnings report as a public company released in August, Bending Spoons said its revenue more than doubled from the previous year to more than $700 million, with growth almost entirely driven by acquisitions, while net income soared 171% to $177 million.

This was before the Airtable deal closed and Miro had not yet been announced. In the quarters and years to come, Wall Street will have a clear idea of ​​the company’s structure’s ability to revive the software.

During the August earnings call, an analyst asked whether Airtable represented a long-term shift in the company’s M&A strategy.

Ferrari said about half of Bending Spoons’ revenue already comes from professional businesses, largely through Brightcove and Vimeo, which have an enterprise component. The recent focus on software, he said, has more to do with how it finds value after a big sell-off.

“Until recently, most SaaS companies were valued at irrationally high levels,” Ferrari said. “We never saw these prices make sense.”

— CNBC’s Ari Levy contributed to this report.