Private Equity, But for the App Economy

 

Private Equity, But for the App Economy

Bending Spoons CEO Luca Ferrari, right, with Federico Simionato, Evernote’s product lead. Photographer: Alessandro Grassani for Bloomberg Businessweek Phil Libin, the co-founder of Evernote, was no longer managing the business by 2022, but he remained an attentive investor and still used the note-taking app every day. He knew that Evernote was stagnating and that its bosses were entertaining buyout interest. The acquirer, he learned, was a Milan-based company he’d never heard of called Bending Spoons SpA. “Frankly,” Libin says, “I didn’t have any expectations.” Several other entrepreneurs have gone through similar experiences since. Bending Spoons is like a new kind of private equity firm for the app store generation. Since buying Evernote last year, Bending Spoons has snapped up five other companies. That includes Dutch file-sharing service WeTransfer, which had shelved plans for an initial public offering that would have valued the company at €716 million ($800 million) just a couple of years before its sale, and the assets of Meetup, a bankrupt events-listing business that briefly belonged to WeWork Inc. Bending Spoons has been around for a little more than a decade, and for most of its life, the bulk of its financing came from Italian investors and loans from local banks. But in recent years it’s raised hundreds of millions of dollars from international tycoons and celebrities, including Ryan Reynolds, Andre Agassi and Abel Tesfaye, aka the Weeknd. Investors valued the company at $2.6 billion this year, making it one of Europe’s most valuable technology startups. As an acquirer, Bending Spoons has a type: distressed businesses with a steady cash flow that sell subscription software. Then it brings in twentysomething coders and data scientists in Italy who add features and sometimes push the limits of what subscribers will pay. To set these apps on a new path, the company often fires the employees it inherited. That’s pretty much what happened with Evernote, writes Mark Bergen. For more about that acquisition and Bending Spoons’ playbook, read: Private Equity Hipsters Are Coming for Your Favorite Apps