Scottish hedge fund Baillie Gifford has marked up Italian app developer and acquirer Bending Spoons by 89%, following an impressive year in which the company made six acquisitions and went from relative obscurity to a name on every fund manager’s watch list.
The markup, made by an investment fund managed by Baillie Gifford which holds a significant stake in Bending Spoons, implies that its overall valuation has increased to around $4.9bn in the last year, up from $2.6bn in February last year. That’s a bigger valuation increase than that seen by Elon Musk’s SpaceX — another of the fund’s holdings, up 86% — or Chinese social media giant (and owner of TikTok), Bytedance, up 33%.
Bending Spoons now represents Baillie Gifford’s Schiehallion fund’s second-largest holding, making up 8.1% of its portfolio, just behind SpaceX’s 9.4% slice.
Baillie Gifford said in its annual report that it continued to see “strong operational execution” from Bending Spoons, as it “proceeds at pace” with its core business strategy — acquiring stagnating digital app companies with a view to improving their underlying products, monetisation and growth.
Bending Spoons declined to comment on Baillie Gifford’s disclosures.
A $600m financing round for acquisitions
It comes in the same week as Bending Spoons quietly announced it’s raised another $600m in debt financing from US-based institutional investors, via a LinkedIn post on its corporate page that promised: “We’ll spend it wisely.”
US-based hedge fund Silver Point Capital was the lead investor on the loan of $600m. It has been used in part to finance the $233m acquisition of US-based streaming software company Brightcove, which was announced in November and closed last month, according to a note from the investor.
The news comes hot on the heels of Bending Spoon’s acquisition last week of Germany’s route-planning platform Komoot — an app that’s gained over 40m users and often tops wellness app store rankings — for an undisclosed amount.
Bending Spoons declined to comment on the details of the debt round.
A brutal, but effective, acquisition strategy
Bending Spoon’s CEO Luca Ferrari previously told Sifted that the company’s ambition is to build one of the most “significant technology companies in the world” through its app acquisition strategy — which he said is best described as if “private equity and Google had a baby.” But unlike private equity firms, Ferrari has said Bending Spoons buys a company with a view to “owning and operating it indefinitely.”
It’s a company strategy that Ferrari said has remained unchanged for 11 years, but the pace at which the company acquires others has undergone a step change in the last couple of years. Bending Spoons made six acquisitions in quick succession in 2024, including Dutch file transfer company WeTransfer, US-based app developer Mosaic Group and beleaguered European streaming startup Hopin.
Bending Spoons is now (in)famous for its post-acquisition strategy of mass layoffs at its acquired apps, and it’s been making these cuts faster with each of its latest acquisitions. Where it took a few months to start firing at scale at Evernote in 2023, things have moved much faster at Brightcove: in just over a month, the company filed a Workers Adjustment and Retraining Notice to the US government announcing a mass layoff of 198 US employees (around two-thirds of its US workforce).
Meanwhile, 75% of WeTransfer’s staff were laid off last summer, just over one month post-acquisition.
It’s a brutal but efficient strategy — and one that’s led analysts at S&P Global to forecast that the company’s gross margin could expand to around 80% in the next year, up from around 77% in the 2024 financial year.
Ferrari previously told Sifted that the startup has been “profitable since day one”, revenues were almost $400m in 2023 and the company was forecasting sales to shoot up further to $500m in 2024.
It seems that investors are betting big on the pace and success of Bending Spoon’s recent acquisition strategy continuing.
Read the orginal article: https://sifted.eu/articles/baillie-gifford-markup-bending-spoons-news/
