A bit more than a month ago, Bending Spoons announced their acquisition of WeTransfer, an Amsterdam-based company. Today it's reported that the new owner will lay off 75% of the staff (~260 people) and it made me feel a bit pensive.
If you don't know Bending Spoons, it's an Italian tech company which acquires existing products and apps. Their strategy so far has been to buy assets that are past their high growth phase, and to make them (more) profitable. Over the last 2 years they bought a few well-known names like Hopin/Streamyard, Evernote, Meetup, and now WeTransfer, on top of lesser-known ones.
Each of there products has a number of devoted users and stable revenue, most if not all of them are profitable, though at least some of them failed to meet their potential:
* Evernote was valued at $1.1B back in 2013, but since then has fell of a cliff and has laid off most of their staff
* Hopin raised more than $1B and was worth $8B at some point, driven by the pandemic-related need for virtual events; since then they shut down all their original products, the only one remaining were acquired apps like Streamyard
* Meetup is still the go-to place for finding local hobbyist events to attend, but changed owners 3 times in the last 7 years
Bending Spoons' model is similar after every acquisition – lay off most or all of the staff and bring the development in-house to lower the costs. Their operations and development in Italy is significantly cheaper than in US, and their products have trusted, if maybe sometimes tarnished, brands that can keep their existing users and potentially bring new ones. Does this work? Private equity companies have proven that acquiring companies and optimizing their costs can work, however since these transactions are private they often remain undisclosed, so it's hard to say how profitable it is. So far Bending Spoons has raised more than $500M and is valued at more than $2.5B, and this year they have been on acquisition spree.
Back to WeTransfer, this one hurts a bit. While I was never a heavy user, I've always seen WeTransfer as a special company – they are a certified B Corp, they've been using their advertising platform to promote artists and culture, they commissioned a short film that won an Oscar. They were also about to go public back in 2022, but their struggled with their business model under the new reality of higher interest rates. So it stings a bit that a local, Amsterdam based, quirky company with such an impact on culture ends up as just yet another product in a large portfolio. Good luck to Bending Spoons though, it's good to see a European tech company growing so quickly!
Vice President of Sales and Marketing at VESTA
These guys know what they’re doing. Luca Ferrari impressed me with a compelling interview on The Twenty Minute VC. Smart guy. I use WeTransfer regularly and I’m sure it won’t skip a beat.