Bending Spoons Tightens Grip on SaaS Castoffs

Bending Spoons is buying software companies at steep discounts, then reshaping their products, operations and workforces as the AI boom shakes up the industry. Workers at Airtable, Evernote, Vimeo, WeTransfer and other portfolio companies have faced layoffs; the company says a “large portion of the pre-acquisition team” at Airtable will leave with “substantial separation packages.” For people whose jobs and subscriptions sit beneath the dealmakers’ bets, this is what corporate consolidation looks like up close.

Who Gets to Call the Shots

In August, Bending Spoons announced it would buy workflow software provider Airtable for about $1.3 billion, nearly 90% below Airtable’s late-2021 peak valuation. Last month, it agreed to buy collaboration software vendor Miro for $1.36 billion. Miro once carried a $17.5 billion valuation. The Italian holding company has also acquired older internet brands, including AOL, Vimeo, Eventbrite and Evernote.

Berkshire Hathaway has invested more than $900 million in Bending Spoons, including another $330 million in a stake disclosed Wednesday. The company’s shares rose 41% after the announcement before giving back some gains, and its market capitalization stood at about $30 billion. Bending Spoons called Berkshire a “longstanding inspiration” for its strategy. That’s capital admiring capital.

Bending Spoons says it wants profits from the businesses it acquires, not an eventual exit. It makes hands-on changes to software, operations and personnel. The company said it hadn’t been outbid for a target in “several years.” Its acquisitions come as AI agents powered by large language models put pressure on software-as-a-service businesses, a shift dubbed the “SaaSpocalypse.” Shares of Intuit, HubSpot and Adobe were each down at least 30% that year, while private SaaS companies struggled to raise money and public markets showed little appetite for initial public offerings.

The Cost Lands on Workers and Customers

Bending Spoons has raised customer prices after acquisitions. In April 2023, months after buying Evernote, it raised the annual personal subscription price from $70 to $130. Later, it charged $100 for its starter plan and $250 for Evernote Advanced, compared with $170 for the former pro plan. Mizuho analyst Lloyd Walmsley said his first reaction was, “Oh man, I guess I have to switch to OneNote,” but he stayed because the product provided value and switching costs were high. Customers can dislike a new price and still find leaving costly.

Former Gainsight CEO Nick Mehta said private equity firms faced constraints after paying higher prices and accumulating troubled companies. “Investors want out but there are no buyers. Anything pre-ChatGPT is legacy now,” he said. Mehta sold Gainsight to Vista in 2020. He said “Bending Spooned” had become a Silicon Valley verb for companies acquired for pennies on the dollar. The phrase gives a jokey name to a serious imbalance: investors and owners decide what gets bought, changed or discarded; workers and customers adjust.

Bending Spoons reported more than $700 million in revenue in its first earnings report as a public company in August, more than double a year earlier, with growth almost entirely driven by acquisitions. Net income increased 171% to $177 million. Those figures came before Bending Spoons closed the Airtable acquisition and announced Miro. CEO Luca Ferrari told CNBC that the “overwhelming majority” of portfolio-company profits went toward future growth, mostly through further acquisitions.

The AI Spending Bet

Analyst estimates compiled by Bloomberg projected that Amazon, Alphabet, Microsoft and Meta would spend more than $720 billion in capital expenditures that year, most of it on AI infrastructure. Alphabet expected capital expenditures of $195 billion to $205 billion in 2027, more than twice its $91.4 billion spending in 2025. Private credit funds including Blue Owl, Apollo and KKR increasingly financed AI development; by some estimates, outstanding private loans to AI-related companies had climbed above $200 billion.

The borrowing and spending carry risks. Alphabet reported negative free cash flow in the second quarter for the first time since its 2004 initial public offering, and its long-term debt stood at about $98 billion at the end of June, more than four times the year-earlier amount. Jefferies’ global head of equity strategy, Chris Wood, called massive U.S. capital destruction the most likely long-term outcome of the AI boom, arguing that cheaper Chinese open-source models could undermine the economics of U.S. investment. Alphabet President and Chief Investment Officer Ruth Porat rejected that assessment. “You must invest for long term growth,” she said. The people directing the spending make the wager; Alphabet’s debt stood at about $98 billion at the end of June.