How Bending Spoons grew to $11B valuation through acquisitions

There is a relatively little-known company in Italy that’s buying subscription apps and legacy mobile-first businesses called Bending Spoons. And that’s the company now valued at $11 billion. Among others, they bought Evernote, WeTransfer, and now AOL. They also announced recently that they raised $700M and nearly $3B in debt for future acquisitions.

Usually, when they buy companies, they let go of most of the team and focus the business strictly on monetization and revenue growth. I’ve stumble upon the interview of Bending Spoons’ co-founder Luca Ferrari where he shares how they approach the m&a. The interview is available on YouTube in Italian. I’ve transcribed it, translated it into English, and summarized it in a couple of clicks using the best voice notes app (in my humble opinion) called SpeakApp AI.

Bending Spoons growth to $11B through acquisitions

Here is a quick summary and then the full interview translated into English

Bending Spoons acquires digital technology companies, uses its proprietary platform that combines tools, processes, talent and scale to unlock value faster than building products from scratch. They focus on adjusted EBITDA rather than net income to measure cash-generating ability, strip out one-off costs, and grow profitably at 20–25% per year. Their acquisition criteria emphasize digital focus, sufficient size, predictability, and clear improvement potential. Italy-based but global in reach, they hire top talent, pay market-leading salaries, and maintain a flat, meritocratic culture.

🚀 Business Model Overview
- Acquire digital technology companies with untapped potential
- Leverage proprietary platform:
• Competencies refined over time
• Proprietary tools and technologies (over 50)
• Automation and AI-based marketing optimization
• R&D investment exceeding $100 million
- Unlock value by improving product features, monetization, marketing, and organization

⏱ Why Acquire vs. Build
- Acquisitions buy time, brand, customer base and switching costs
- Viral effects and scale advantages are hard to replicate from zero
- Starting from an existing foundation accelerates market success
- Mathematical certainty: faster, more predictable path to positive results

📈 Economies of Scale and Synergies
- Bulk cloud infrastructure deals (Google, Amazon) reduce unit costs
- Shared platform functions (recruiting, payments, analytics) spread fixed costs
- Marketing automation scales across portfolio, saving tens of millions per year
- Stand-alone companies lack scale to justify large R&D or infrastructure deals

🛠 Evolution Since 2013
- Core strategy unchanged; continuous refinement of processes and tools
- Early days: manual marketing campaigns, living-room office, founders doing recruiting
- Today: 40-person data science and engineering teams, modern offices
- Emphasis on constant improvement—stagnation equals death

💰 Financial Metrics and Growth
- 2024 revenue forecast: just over $700 million; 2025 expected ~ $1.2 billion
- Net income is misleading due to depreciation on acquisitions, stock option vesting, one-off M&A costs
- Preference for adjusted EBITDA as a proxy for sustainable cash generation
- High adjusted EBITDA margins yield several hundreds of millions in profit
- Targeted profit growth per share: 20–25% compounded historically

🧮 Adjustments in EBITDA
- Exclude one-off acquisition costs: advisor fees (1–4% of deal value), severance packages
- Strip out non-cash amortization of intangible assets
- Roll back extraordinary events to gauge underlying operating performance

🔍 Acquisition Process
- Team screens ~5,000 companies annually using key parameters
- Shortlist involves internal and external experts on product, tech, monetization
- Criteria for selection:
1. Digital technology focus
2. Sufficient size to matter (>1% of platform revenue)
3. Predictability of future performance
4. Clear gap between current management and Bending Spoons’ capabilities

💲 Price and Value Creation
- Financial return driven by dollars invested vs. dollars generated, discounted over time
- Price matters but only in context of potential improvement band
- Focus on operational upside: product, marketing, tech, organization, margins

🏷 Labor Cost Myth vs. Reality
- Contrary to rumors, no cheap-labor arbitrage: Bending Spoons pays top-market salaries
- Entry-level developer: ~€64k; mid-level (~5 years): ~€200k+; 30% stock discount
- Value created through smaller, empowered teams with high talent density and autonomy
- Revenue growth and cost optimization (marketing, tech) drive margins, not headcount cuts

🔗 Portfolio Diversity and Common Thread
- Consumer-facing apps vary widely (WeTransfer, Splice, Evernote)
- Shared “engine”: common platform technologies, recruitment, marketing machinery
- Heterogeneous external brands over homogeneous operational backbone

📈 Public Investor Takeaways
- Think independently, apply rational skepticism, stay patient
- Develop and vet a few high-conviction ideas; use scenario testing and devil’s advocacy
- Stay within one’s circle of competence; deep knowledge beats broad superficiality

👥 Talent and Recruitment Strategy
- Receive ~350,000 applications per year; hire ~150 (selectivity ~1 in 2,400)
- Offer competitive pay, equity discounts, rapid career progression, high-impact roles
- Talent density and meritocratic culture: CTO at 30 years old, rapid promotions
- Low turnover (~1% per year) due to challenging work, supportive environment, variety of roles

🌍 Workforce and Geography
- ~500 direct employees (“spooners”), ~1,000 including acquired teams
- Headquarters in Milan, Italy (350 employees); other hubs: US (200), UK (100), Netherlands (50)
- Italy chosen for abundant eager talent and potential to inspire local ecosystem

💸 Funding History
- Equity raised ~$450 million: ~$250 million growth capital, ~$200 million secondary
- Debt raised ~$1.5 billion; majority of growth financed through reinvested profits and debt
- 2021 revenue: ~$110 million; 2022 revenue: ~$160 million (net loss $12 million)
- 2023 funding valued company at ~€1 billion based on compounding profit growth

👀 Investor Perspective
- Sophisticated investors saw high profit compounding, scalable platform, and rising EBITDA margins
- Economies of scale mean semi-fixed platform costs shrink as revenue grows
- Access to capital is an accelerant; cost of capital vs. return spread critical

🔄 Impact of External Funding
- Minimal operational changes due to pre-existing discipline and passive investor approach
- Governance remains founder-led, with limited interference as long as performance stays strong

🏆 Notable Acquisitions
- Splice (2018): non-monetized GoPro spin-off; huge upside in monetization and efficiency
- Evernote (acquired two years ago): large team, structured management; successful turnaround
- Worst deal: app driven by viral growth in one geography; downloads collapsed after cultural trend faded

🌐 Global Revenue Mix
- United States: ~55% of revenue
- Italy: ~2–3% of revenue

🏠 Headquarters and Future Moves
- Milan HQ to leverage local talent and inspire Italian tech ecosystem
- No immediate plans to relocate; may add offices closer to large enterprise clients

📈 Public Listing Considerations
- Pros: broader access to capital at better terms, faster acquisitive potential
- Cons: onerous reporting, public scrutiny, potential for short-seller attacks, stock price distractions
- No decision made; likely destinations: Nasdaq or NYSE if pursued

💪 Personal Drive and Resilience
- Founder has never seriously considered quitting; deep responsibility to colleagues, investors, users
- Competitive ambition to build Italy’s most valuable company and leave no regrets
- Embraces hard work, occasional discouragement but never gives up

Conclusions
Bending Spoons’ success stems from acquiring digital businesses where its proprietary platform—tools, scale, talent and processes—can unlock value rapidly. They measure performance via adjusted EBITDA to reflect true cash-generating potential, excluding one-off costs. Their disciplined acquisition process, meritocratic culture and top-tier compensation attract elite talent and fuel 20–25% annual profit growth. While public listing remains under consideration, their focus on compounding returns, economies of scale and unwavering drive positions them for continued expansion.

Here is the full interview translation in English

So, we have the blue pill and the red pill. Let’s do a bit like Morpheus; blue pill, let’s have a very mild interview, we’ll fill our mouths with marketing, I’ll flatter you for an hour, and in the end, we won’t achieve anything. The red pill, however, I’ll go in strong, be concrete, and hit hard. Come on, let’s do a mix of blue and black. Well, I’ll eat this one anyway just not to waste it.

Great. And actually, I would start off with the super concrete. Good, by the way, it’s been ages since I’ve had it. By the way, fun fact— I asked you before, are you vegan or almost vegan? Essentially, many people don’t know this, but the red dye is of animal origin, so for all the vegans listening, take note. I made a small exception today, and that’s okay. Anyway, how would you explain what you do? What is your business model in the most concrete terms possible? And if you want to add a cherry on top, how do you make money, which is ultimately what matters.

Sure, look, we find digital technology companies, not just any company out there that we think has untapped potential because the technology could be better, the product could have more useful features, more efficient monetization, more targeted marketing, and streamlined organization. We acquire them if they sell to us, and then we try to transform them to realize as much of that potential as possible, essentially bringing them as close as possible to their ability to succeed in the market. We do this with what we call our platform, which is a bit of an abstract term, but essentially means the competencies we’ve built over time and continue to refine, proprietary technologies we’ve created, our own tools that are not available on the market, and that help us do these things better than most other teams.

We have access to talent that we have cultivated over time, which allows us to employ very skilled people, and a series of other advantages that make it possible for us to do better than not everyone out there, but many, let’s say. Okay, then the spontaneous question arises: why acquire companies, given that you have all this internal proprietary technology, when you could simply develop a product?

Well, typically, in the end, we acquire time and competitive advantages. Very concretely, again, since we’re taking the red pill, if a company has built a well-known brand, it already has a customer base, for example, which gives it scale advantages, or there are switching costs. Additionally, with many customers, the brand continues to be nurtured through positive word-of-mouth, making it very difficult to launch a product that competes and gains market share from scratch.

They might have reached that point 10 years earlier, when there wasn’t any competition in that particular segment, or maybe they were the first to go there, or at that time, they brought a significant innovation that allowed them to create a competitive advantage. Now, competing with that product would be very difficult, very costly, and likely unsuccessful. Acquiring it allows us to start from a foundation of success and improve from there.

And we buy time, meaning even if we were able to, launching a product from scratch, it would typically take many years to achieve a similar position to that of that particular company because many of the effects in play, for example, word-of-mouth, take a long time to develop. You acquire customers because satisfied customers tell others about the product, and those others use it.

This is an almost exponential effect, so it takes a lot of time to build a customer base, and time is money. Yes, I’m sure you’ve talked about it on your channel—at the end of the day, for us, acquiring means having more certainty of achieving a positive result and reaching it sooner. So, it’s a mathematical issue, and while it may seem trivial, I don’t think it is.

If these companies have this potential, why sell? Well, because potential doesn’t exist in a vacuum; it exists in connection with other factors, like who works there. For example, a company might not be able to unlock its potential because that potential can only be realized within the broader context of Bending Spoons, where we have economies of scale that the individual company doesn’t. For example, when we negotiate with our suppliers, Google, for instance, or Amazon for cloud technologies, simply the expenses of cloud infrastructure are significant costs in a digital business, and we negotiate contracts that may be 10 times larger than those of the single company we’re acquiring, allowing us to obtain much better terms.

It’s not that the people at that company aren’t good; they just don’t have that advantage. Yes, yes, utilizing scale. This is just one example of many. Another example is that we’ve built many technologies, our own tools—more than 50 over the years—that allow us to do things very well. One of these, for instance, is a series of automation tools, some based on artificial intelligence, that allow us to manage marketing expenses, especially on search channels, like when you go on Google and search for video editing apps; we can do it completely automatically. We invest tens of millions each year, and it’s an algorithm that does this, and to have that series of tools, we’ve invested significantly over the years, more than 100 million in total in research and development across all these technologies.

Clearly, this spending makes sense to the extent that we can then reap benefits across the many businesses we own and manage, but if you have only one, that’s not an investment that yields a positive return. This is another example. There are many others. The fact is that very often, the company on its own is not able to unlock this value, and sells to us because we can unlock it.

It’s a win-win. Yes, yes, yes. And has the business model always been this way? Has it changed over time? I mean, how did it start? What were the origins compared to what it is today?

I’d say in the first person it’s always been the same. So, as an individual, not the company I represent today, I ran a startup before Bending Spoons from 2010 to 2013 that had nothing to do with this strategy; it was a classic product idea, in that case, it was a diary that had to be written by itself with AI and that went poorly. But since we started Bending Spoons in late 2013, the strategy has been this.

It’s clear that more than 10 years have passed; stubborn people do not change or improve. We’ve refined many things, enhanced, improved, but the core has remained the same. And regarding that, for example, you said you’ve refined, improved, are there any specific things where you feel like, “Wow, we’ve really changed a lot”?

Well, then the metaphor, since in the end, a nice metaphor is sports, right? I mean, if you play tennis, you start at 12 years old training, always playing tennis, and there are the forehand, the backhand, right? When someone becomes Novak Djokovic, they find themselves playing Wimbledon; the strokes are always the same, but it’s all 10 times better. Our journey has been somewhat similar conceptually; almost everything we do is better, from frankly not very significant things, like the office.

Today we’re recording here from our office; when we started, we were in the living room of a shared apartment with the other founding partners. I mentioned earlier about that technology, those marketing automations. At the beginning, it was one of my partners who literally manually handled all the campaigns, checking the data, and the recruiting team. Initially, I was the one downloading lists from Alma Laura and calling one by one all the graduates, let’s say, from the Polytechnic of Milan, the University of Padua, trying to convince someone to come work with us.

Today we have a team of 40 people with data scientists and research engineers creating predictive models, lead generation campaigns, so really, almost every area has improved. Luckily so much because we work incredibly hard; it would be dramatic if we hadn’t improved. Well, actually, for the Italian market, you often have companies that stay exactly the same for 10 years, and that’s something that, in my opinion, needs to be understood—that if you stop, you die.

This is a concept that I believe needs to be conveyed. But let’s get back to the concrete; let’s share some numbers. I think 2023 isn’t closed yet, so let’s talk about 2023. A few numbers, such as revenue, profit. 2024. Okay. Fine, 2024. Look, in 2024, I’ll give you the numbers in dollars because internally we deal in dollars. Still, the euro is close to the dollar; it changes a lot. We expect revenues of just over 700 million, and for 2025, we expect revenues probably around 1 billion and two.

In fact, we don’t look much at the net income— as they say, profit margins— because valuing a company from the outside that may not have other, it’s fine, but for a company like us that is very acquisition-driven, net income tends to be very misleading as a measure for a series of reasons. Then I’ll tell you a measure of profit that we use instead, which I think is more adequate, at least in our case. Net income tends to be misleading because there are many reasons, but let’s say, assuming we’re looking for an indicator that gives us a sense of the business’s ability to generate cash looking forward, typically one seeks that reasoning.

First of all, when we make an acquisition of an asset, there’s depreciation, and that depreciation there applies, depending, but maybe for 5 years, it kills net income. But if you decide tomorrow to stop making acquisitions, that’s not really a cash impact—an investment you made years before—of an asset that might last 20 years, 30 years generating you cash. However, regulations tell you that you must depreciate it over a fixed number of years, and this kills the margins on net income.

Another thing you can have are all sorts of aberrations or accounting artifacts due to the fact that you have to consolidate a balance sheet. We have many subsidiaries, many companies we’ve acquired, and we will have 30 that we try sometimes to liquidate, but we’re always acquiring new ones. You must, like mother Bending Spoons S.p.A., consolidate all these balance sheets, and you end up presenting things that are truly distorting.

For example, when we acquired one of the companies in 2024, as is very typical, both the management team and all the staff had stock options, and as per how the stock option plan was structured, in case of acquisition, all these stock options that had a vesting period in the future would vest immediately, of course. So, we paid a price that had nothing to do with this aspect that was what we were willing to pay, and the seller then knew that they had to redirect some money, in this case about 90 million dollars, to all these management team staff for these stock options.

However, when you aggregate, let’s say, consolidate the balance sheet, you find a cost line of 90 million in 2024, which is completely an artifact in the sense that it is neither indicative of the cash generation of that business nor of your business looking forward. This is tied to the transaction event, and it also hides the fact that, in reality, that cost was actually borne by the sellers, who accepted a price that was essentially a bit lower to then compensate employees and management according to the agreement they had with them.

So, that thing kills the net with that 90 million, but it has no relevance on your ability to generate cash. Or extraordinary M&A costs. When you do an acquisition and you have an advisor, it is perfectly normal to pay 1, 2, 3, 4% on acquisitions of 500 million, and you understand that can also translate into tens of millions. So, net income tends to be a bit misleading.

We look very closely at EBITDA or adjusted EBITDA, which is essentially the operating margin, that’s a better proxy to determine how much cash this business generates if we stopped making acquisitions. That value we don’t share externally, but I can tell you that our margin is very high and, in 2024, several hundreds of millions. On the other hand, adjusted EBITDA, or adjusted, okay?

And what’s the difference in the adjusted one? What do you take into account? What don’t you take into account? The adjustments, the main adjustments in terms of impact are related to one-off acquisition costs, for example, the costs of advisors. What we often do is typical for us; when we make an acquisition, we do a mass layoff if we believe that company will function better with a smaller team. We provide generous exit packages well above the market, and the cost can be substantial. Last year, several tens of millions.

That again is something that you only have one-off after the acquisition event and is not indicative of a recurring cost that the business will have. So typically, when you go to make adjustments, this is something that auditors also do, I don’t know, from EY or KPMG, and you would consider it an extraordinary cost that you roll back to arrive at these adjusted EBITDA, which still amount to hundreds of millions of dollars, but with significantly higher adjustments. This is also the reason why the last round that just concluded valued us at almost 5 billion euros, and these are certainly very sophisticated investors, not someone who says, “Ah, they don’t know anything.”

They wouldn’t do it if they didn’t see that ability to generate cash. Now I stay on this topic because I’m very interested—also because I think you know—one of my models is Warren Buffett, who has his own opinions on EBITDA, but there we’re talking about public companies, it’s a different dynamic.

Well, I agree with him, by the way; I think it depends. Okay, okay, anyway, I’ll let you finish. Well, the dynamics are a bit different. Let’s say I think a private company should be evaluated differently—that it shouldn’t be evaluated the same way. However, for example, you mentioned revisiting things like advisory costs or severance packages, but if that’s part of your business model, can’t it be considered instead as something that I expect to happen regularly, so I do, in fact, consider it a cost?

Yes, it depends on what you’re looking to evaluate. First of all, let’s take a step back. Warren Buffett says that if you have a business that continues to require capital investments—well, he created his theories in an era when investments in industrial goods companies were predominant. If you have a business that requires ongoing investments in what is called property, plant, and equipment, then you need to be careful.

If you focus only on the operating margin, you miss the fact that that business will continue to consume cash, or if you’re a business that has a lot of inventory—so as it scales, it continually sucks more capital to increase working capital. You’re missing a significant negative profitability factor, and in that case, EBITDA would be misleading.

For us, these things are zero. Essentially, we don’t have inventory, we don’t have significant investments in any asset that involves depreciation, amortization, except for an intangible asset, like IP, exactly. So it’s quite a different thing. We also have a very unusual model, whereby there are very few businesses like Bending Spoons on the market. If you’re trying to assess profitability as it stands today—if you’re trying to evaluate how much cash our business generates today—then I think excluding those one-off costs is right because then you say, “Okay, let’s pretend Bending Spoons stops making acquisitions as of tomorrow; over the next 10 years, how much cash does that adjusted EBITDA generate?”

That gives you that answer. If, on the other hand, your goal is to understand what the cash generation is in that specific year, then absolutely, adjusted EBITDA is not the right tool, nor is net income, because there are a lot of non-cash costs, like I said before, the amortization of an intangible asset. In that case, I think a more interesting question to ask is how quickly I think this business could produce the famed compounding, so you choose a profitability measure that you think works for you, whether it’s adjusted EBITDA or net income, and you ask yourself how quickly you think this could grow over time.

We historically maintained—this was also an indicator Warren Buffett cited in his letters to shareholders at Berkshire Hathaway—historically, not so much in recent years, too large—but it has always been able to average between 20-25% growth per share. That’s a very interesting indicator, and you can evaluate it, if you’re not publicly traded, you can evaluate it on net income, adjusted EBITDA, just EBITDA; whatever one you look at, averaged over time, we’ve grown extremely fast to record levels, much higher than 20-25%, being even smaller makes it easier.

I’m saying that we’ll reach 20-25% valuation at a trillion like—well, so if you look at it, if you want to assess Bending Spoons on its current status—saying this perimeter today, if they stop acquiring, how much they earn—then I think adjusted EBITDA is the closest thing to optimal for doing that, and you get an answer. If you want to disregard how much they decide to reinvest back into the business—because they make acquisitions, pay advisors, etc.—how quickly does this indicator of profit increase over time is another way to ascertain how much value there can be.

So whether you choose EBITDA or net income, ultimately you reach a similar answer, even though in a particular year, one can be favored while the other is disfavored, but if you look over a period of maybe 2-3 years, the answer you reach is quite swiftly. Excellent.

Let’s talk a bit, go back, and discuss the process that leads you to say, “Okay, I see potential in this product, in this company, I evaluate it for acquisition.” I’d like to know what you originally see that makes you say interesting and then how the process actually works briefly. Well, there’s a team of about ten people trying to evaluate as many things as possible. Last year we considered over 5,000 companies, even superficially, and they have a whole series of parameters. Now I can’t say everything, but several parameters through which, let’s say, we narrow down this list so that it’s more manageable; the more we approach a shortlist, the more we involve experts from outside this team who work at Bending Spoons and who offer specific contributions on how something can be improved, how monetization can be improved, how technology can be improved.

We refine, and we have projections essentially, and at the end of the day, the criteria for selecting a company are digital technologies. Currently, we don’t evaluate supermarket chains, even though they could be interesting to consider in the distant future. Well, since Amazon wants to make the cashier-less ones? Exactly.

The size must be large enough that it shifts the balances, because as I said, this year we expect revenues of over 1 billion. It’s clear that if something adds a million in revenue, perhaps in relative terms it could be very profitable, but it results in more headaches than it’s worth. Third, we must be able to accurately predict the future for that business.

So there are some areas where we don’t feel comfortable. For instance, we’ve never made acquisitions in gaming where, perhaps if you consult an expert, they’d say, “No, Luca is wrong,” but my point is it’s not that I understand gaming; in fact, we understand little. It seems to me that the trajectories of these businesses are a bit based on current trends, and so we tend to be uninterested. But we can take a look at everything; however, it’s essential for us to make an investment knowing what we can achieve.

The final criterion is we must be convinced we can manage that business much better than how it was managed before, and that’s the only way for us to make an attractive offer to the potential seller while thinking we can generate interesting returns for ourselves. The broader the range of trajectories of a business managed by those currently handling it versus how we manage it, the wider the band, the more this is true, and thus we can make everyone happy, essentially.

And when is that range wider? Again, we must think while analyzing that business from the outside that the product can be improved, the organization can be improved, the monetization is far from optimal, the marketing is far from optimal. We try not to share the exact indicators because, naturally, that’s a bit of a competitive advantage.

Of course. How important is the price paid for you? Well, I mean, ultimately, the purely financial side boils down to whether I invested a dollar or how many dollars I generated over time, you know? Then with the appropriate discounts for time in the future, what you want, and clearly in that equation, price is a factor.

Okay, apparently the camera overheated. I hope that someday you will buy Sony to fix this issue too. In any case, the meaning is clear: there must be potential for improvement. Perfect. Before preparing this interview, I read not only past interviews and listened to those done, but I also looked at the comments under these interviews, and I found one that recurs—not too much, but I found it interesting because it summarizes, in my opinion, both a mentality and a legitimate doubt that might arise, namely: what do you say to those who claim that all you do is buy a company that may not be doing well and fire a lot, hire cheaper people, and there’s the profit?

Uh, there’s a lot to say here. Let’s see where we start. Well, first of all, it’s not true that we necessarily take companies that aren’t doing well. We’ve taken high-growth companies, companies that were stagnating more or less, companies on the decline—everything, so that’s not true.

Secondly, it’s also not true that we profit solely from the per capita cost of the staff. That’s wrong. I’ll give you the data, the facts. For the same role and seniority, we pay at the top of the market in Europe, and it matters that we take the role of software engineer, which is the most represented at Bending Spoons but also at the companies we acquire by far. A recent graduate with us typically earns €64,000; a mid-level software engineer, with around 5 years of experience, is in the range of—let’s say around €200,000 or more.

It’s worth noting that this is all fixed. When you look at the headline numbers in job offers, there might also be parts with vesting over 4 years, variables that are unclear, so everything is fixed; that has a value, and one has the opportunity to invest in Bending Spoons stock at a 30% discount, so when you factor that value in, the numbers I just mentioned should be further increased. So, not only are these values completely off-market in Italy, but they’re also at very high levels in Europe.

We often hire people from top universities, including Oxford, Imperial, Google, Meta, so clearly we cannot pay at mediocre, let alone low levels. When we’ve made acquisitions where there was a workforce in Europe, the per-capita cost in the acquired company was always lower than that of Bending Spoons; in reality, the phenomenon was opposite where the workforce was in the United States, which generally cost a bit more, but not double; that’s not where we made our profits.

Where do we generate value? Let me discuss costs and revenues. Starting with costs, where we generate value is typically definitely not paying people less; on the contrary, we often pay more, by creating smaller teams with fewer managerial layers, much more autonomy, greater talent density, unleashing essentially the sense of ownership and entrepreneurship of people, doing more with smaller teams, I reiterate, often better paid than before, and then optimizing marketing expenses. Sometimes we find large budgets that are maybe managed inefficiently in channels or initiatives that don’t bring value. We’re, I believe, good at being very rational and scientific, I would dare say, in optimizing that.

In terms of revenues, we generate value mainly by improving the product, enhancing new marketing strategies, acquiring more users, improving monetization, and enhancing technology. So that idea of arbitrage on labor cost is completely false. It is absolutely true that we often cut a significant slice of the acquired team, but this is not because the business, as you see, was not doing well; in fact, many of the business acquisitions were growing, but we simply believed that a smaller empowered team, with more responsibilities, less process, less management would do much more than a bigger team with more bureaucracy and processes, and I think the facts have proved us right.

Perfect. Going back to your products, I noticed that they are very different. In fact, I don’t see a common thread because I’ve seen apps like WeTransfer, and I’ve seen products like Splice, which is for video editing. Is there actually a common thread, or is there perhaps a willingness to create this heterogeneity to diversify? We like diversification, but it’s not something we actively pursue; simply, the common thread is, look, to give you another metaphor, it’s like they’re all cars with different liveries, different brands, but with a common engine; what is common is the way we work, the technologies that underlie them, that platform in the strict sense I mentioned earlier.

Now, what we call the external image that the consumer or the company buying our product sees tends to be very heterogeneous; we don’t pursue consistency from that perspective. I think an interesting example in a completely different market is P&G—Procter & Gamble, which I think your audience may know. They have many of the most famous supermarket brands in the world; often, consumers don’t even know they’re behind the same company, and what’s common is that operational and marketing machinery, but what we have in common is technology; hence, the market is completely different. Okay.

So, it’s not so much about the nature of the problem that the product solves but more about the organizational base. Okay? We’ve somewhat explored your acquisition method; your process is very function-based on what you’ll do after. Yes, but I’m speaking to an audience that mostly focuses on publicly traded companies, so it’s a whole other league, and they can’t directly influence changes to the businesses. So, just to say, is there something you’ve learned from this experience that you think could apply to someone wanting to invest in Procter & Gamble, for example?

Without a doubt, but my advice is always to, when making investments, think of yourself as being less skilled than you would naturally believe, so buy an index—then, I don’t know—because there’s a world of well-armed professionals in investments; it’s hard to outdo them. However, at a high level, then maybe we can double-click on a couple of things. I’d say that rationality and independent thinking go hand in hand, and then patience. By rationality and independent thinking, I mean being able to listen well to everyone’s opinions—everything you find online is correct, important, indeed stimulating to think. But it’s essential to form your own opinion, in my opinion, with your own mind, to be very critical, skeptical, and to question things, going deep into them; this saves you a lot of mistakes.

Typically, the best investments are also those with a somewhat counter-cyclical, somewhat controversial edge, and if you listen to mass opinions, it’s hard to identify them. Well, in terms of patience, I’d say that in general, emotions, impulsiveness, enthusiasm are poor advisors when it comes to investments, in my opinion. So if an idea comes, never act on it immediately—you know, no one thinks they are going to be a high-frequency trader who, if they don’t catch a stock within 5 seconds, should never act on it immediately, in my opinion. Note down the idea, look at it again after a few days, a week, if you still like it as much, that’s a good sign. If the emotion has passed, and you say “Ah, that was a bit of nonsense; maybe I won’t do it.”

I’d also add that it’s useful—in the sense of conscientiousness and discipline—to invest time in refining a few ideas rather than trying to have many or pursuing many. For example, I suggest writing down an investment idea, describing why it’s a good idea, why it’s not a good idea, showing it to someone else or if you don’t know anyone with a minimum of expertise, to try to wear the critic’s hat yourself and dismantle it in every way, I mean really taking the time to create a process almost like a natural selection of ideas, where if an idea survives on the other side of that tunnel, it’s probably good, it’s anyway much better than the average of those that were at the beginning of that process.

And finally, I believe that competence is much better in life, certainly in investments; knowing a lot about a few things is preferable to knowing a little about a lot of things, provided that a minimum general understanding always helps, so going deep, studying a topic well, doing your homework, and accepting that you can’t do everything. Well, Warren Buffett, who is also a personal hero of mine, and you mentioned him, always said that it’s important to stay in, well, your circle of competence, right? So these things we see very much even on our end. I think they’re true for any investor.

All of them seem to be excellent tips. Well, since you were born, you’ve received hundreds of thousands of applications, and one of my questions, and I ask you this as an entrepreneur who also deals with people—what’s the secret, if we want to say, even if there isn’t one, to being so appealing in the job market? Is it just paying people a lot?

No, well, certainly offering very competitive pay is an essential part of this for nearly everyone. It’s a top-three factor, let’s say, at least. It’s probably not about maximizing remuneration but feeling that one is compensated at least in line with market expectations. It depends on who you want to attract, in my opinion. I see jobs as a product in the end, and thus it must be improved according to the customer you want to buy it, in a sense.

So, I can tell you the kind of person we look for and for whom we’ve tried to optimize work here; it’s a person who is very, very ambitious, who genuinely seeks to learn a lot, who wants to feel that they’re quickly taking on responsibilities and having a substantial impact, and advancing rapidly in their careers; they are clearly very talented individuals. And for those people, what we aim to offer, which I think is a bit of a “killer feature,” is, in no particular order—aside from very competitive compensation—an extremely high-quality colleague base; we talk about talent density. Last year, more than 350,000 candidates applied to work here, and we hired 150, so it’s one in around 2000-2400, which is a selective rate; it’s the most selective process I know, certainly more than the famous Big Tech companies, more than Stanford, Oxford.

And what happens is that when you have that level of selectivity, you work with very strong individuals, which is fantastic because you learn a lot, and the work itself becomes very satisfying. This is an extremely important factor. We have a very flat and meritocratic culture that allows a talented individual to advance at a speed that is totally off the scale compared to most companies. Once again, since we took the red pill, let’s give very concrete examples: currently, our CTO, the person who leads the entire engineering and technical side—who also leads all the acquisitions, which means well over 500 engineers—is just 30 years old and has been with us since just before college graduation.

A role like that, if you look at the market, you find people of 50 years old with 20-30 years of experience. I believe he’s very competent, even more competent than those who’ve earned it in the field. Since we’ve had the so-called courage to give him this responsibility very early, even the person who leads Evernote, there was a CEO previously, around 50-60 years old, and now she’s about 28. You don’t find many companies like Bending Spoons that if you’re very deserving, they leap and give you all this responsibility so early?

So, this is the second factor. The third factor is a lot of freedom, flexibility, trust, and a very collaborative atmosphere, making the environment, I think, enjoyable to be in. Obviously, there’s pressure because we want to be super high-performance, but it’s also a very supportive, friendly, informal environment, and consider that we have a turnover rate of about 1% a year, which is very low in the tech world, rarely less than 7-8%, so an absolute outlier, and the things I mentioned earlier are an essential element of this too.

And the last point, which is something I realized only in the last year or two, so it wasn’t by design as they say, but it has become important, it’s very cool; it’s been a realization for me. It’s really cool to work in a place where without changing companies, so the rules of the game, colleagues are more or less the same, you can face very different challenges in very different areas. For instance, you might spend a year on Evernote, then six months with WeTransfer, then work at a platform level on a payment management tool, for example, and that’s not something that many companies, almost none, offer.

So, I think this is another element in terms of talent for us of competitive advantage, without a doubt. Today, what are some workforce numbers? How many are there? How many are in Italy? Are they all in Italy? No, no, we’re not very distributed. So, at our company, which we call—let’s say, spooners, people we’ve hired directly—there are just under 500 of us.

Then if we look at all the acquired teams as well, we’re around 1000, roughly speaking. Concerning geographic presence, anyway, Italy is the primary location; I’d say we have more than 300 people, about 350 in Italy, around 350 of the 500 in total. Practically all of the 500 are here. Then we probably have about 200 in the United States, around 100 in the United Kingdom, 50 in the Netherlands, and then a long tail of various countries, mainly in Europe and North America, but clearly.

You’ve received $340 million in funding in 2022, plus new rounds, and in 2022, your revenue was $100 million. So my question is, what did those people, those institutions that invested in you see to justify a multiple, a potential investment so high?

Yes. Okay, let me clarify. In 2021, we made $100 million, okay? $110 million, I think, with a profit of $15 million, net profit, the bottom line. In 2022, we made 160 million and lost 12. Okay. Still, the concept is valid; I just wanted to clarify that.

Perhaps I should also clarify the funding we obtained so that we have all the—I think you like numbers as much as I do. So in the first capital increase, we raised around $450 million in equity, of which about $250 million was in capital increases—so injections that finance the business—and about $200 million in secondary funding, meaning investor X selling to investor Y to liquidate their shares.

The company is completely neutral in that respect. It’s simply people who want to cash out and people who want to invest. Concerning debt, we’ve raised about $1.5 billion. Historically, almost all funding has come from reinvested profits and debt, with equity around $250 million, which isn’t much; it’s not little, of course, but it also isn’t preponderant relative to the figures I’ve mentioned.

In 2022, most of that figure you mentioned was debt, there was about $50-60 million in equity, almost all secondary, so we did not finance with an exit. The first significant equity capital increase investment was in 2023 when Bailey Gifford, Cox Enterprises, soon after Durable Capital, came on board with about $70 million in capital increase, about $50 million in secondary funding, and this was also the first time we were valued at around a billion euros.

What did they see? Well, those investors clearly had access well beyond the public balance sheet; they were able to make all the necessary adjustments and due diligence, they could see our projections for the future, analyze thoroughly. Essentially, they saw some of what I mentioned earlier, so a lot of that net income is muddied by the fact that there are many costs or accounting aberrations or one-off acquisition-related costs, so it doesn’t give a full representation.

In fact, those years, EBITDA was around $20-30 million, which by the way was already more in line with that evaluation between half a billion and a billion. In reality, in 2022, as you said, we were worth less than half a billion, with BIG EBITDA of $20-30 million, which is perfectly in line with the multiples on the market, but above all what they saw was the speed at which we compound, that is, how much profit increases each year per share, which is what they care about.

Then there’s all the dilution effect, of course. Exactly. Additionally, we had a track record that improved in relative terms even in terms of diluted earnings per share; we grew faster in 2023-2024 and still expect to grow in 2025 at a rate exceeding what we did over the last 23 years, so they saw that aspect, and they said, “If these people continue to perform around the past numbers, I can think about where my capital will go, assuming that the multiple remains relatively similar; I can imagine my capital will grow at that rate,” and it was a very attractive rate for them.

Furthermore, keep in mind that our model benefits from economies of scale, in the sense that there’s a semi-fixed cost of operating this platform. All these teams are not specific to any product but work on these technologies, tools, services that all products use, from recruiting to processing all the payments, to the marketing automation I mentioned before—there are over 50 in total, as I mentioned.

Everything here is relatively stable over time. So, the more revenue you generate by adding businesses, the smaller the impact of that cost on margins. For instance, if back then the EBITDA margin was about 15%, so okay, nice, but nothing extraordinary, nowadays it’s much higher, and we expect it to continue growing in the future precisely for this reason.

Obviously, these investors are sophisticated; they were able to look under the hood and convinced themselves that this would happen. When you receive so much funding, whether equity or debt, in general, someone is betting on you; does it change how you operate? Are there added pressures that lead you to behave a certain way? How does it work?

A little, a bit of it changes. How much it changes depends on a variety of factors: one, how structured, rigorous, and disciplined you were beforehand. The more you were, the less you need to change. The more amateurish you were, relying on gut feelings with little reporting, the more you need to change because investors expect you to inform them about how things are going.

We felt we were already quite structured, professional, precise, and disciplined, so the increase in complexity was relatively contained. It also depends on the type of investor or creditor that you bring on board. We’ve had very passive investors—I say this positively—meaning they observe, but their mandate is not to pressure you, unlike some others, which is also a perfectly sensible way to operate, depending on the type of investments you make.

Moreover, we’ve done well, and you can imagine how the cracks appear, particularly when things aren’t going well. As long as you’re doing well, they say, “Well, a winning team doesn’t change.” I must say we have always managed to maintain a solid governance structure at the statuary level, so the margin for interference from these partners is still very modest. However, one can exert pressure, even just psychologically, you know?

So, in relation to the acquisitions you have made so far, is there one in particular that you think has been the best either in terms of metrics, numbers, or perhaps even for what it has taught you?

Yes, I tend to think that the next one is always going to be the best.
I imagined that the red pill categorically forbids that.
Yes, look, I’ll mention two that I think have been quite watershed moments for us. The first perhaps is Splice, acquired in 2018, a video editing app that was part of GoPro—speaking of cameras, overheating. Exactly. It went very well because it wasn’t even monetized; being a very small business for GoPro, they hadn’t taken care of it much—understandably so.

At the time, we were much smaller, so for us, it was significant. Not being monetized, we succeeded in making extraordinary economic improvements, which is typically unrealistic, but it was. It was also the first time we acquired from a very structured institutional seller; until that year, I repeat, in 2018, a lifetime ago, we only acquired from, I don’t know, individual developers from Canada who had a small app, which involved a completely different shade of negotiation—bureaucratic and legal dynamics.

So, nonetheless, it was a crucial shift for us. The second one I’ll mention is Evernote, acquired around two years ago, which was the first time we acquired a company that already had a significant team, a very professional management structure with very credible track records, so it was a pretty robust beast. We had never done that before, and I believe we were somewhat understandably insecure about whether we would be able to do significantly better.

The answer was yes, and it wasn’t obvious—this gave us great self-confidence and also a lot more credibility regarding various financial investors. In fact, the most significant rounds we conducted happened about 6 months after the acquisition when it started to become clear that we were doing good work. So it was also a sign of saying, “Hey, we are serious about this.”

Yes, we’ve always had that; consider that when we started 12 years ago, we said we wanted to build the best company in the world, which then, of course, is entirely illegal—the red pill entails saying such things—but I mention it only to convey the level of ambition we had. However, it’s clear that someone on the outside, when they see you making a big step, believes more if they see young kids—maybe back then, I don’t know, 28-30-year-olds saying, “We can pull this off.”

Sony, please grant us the last 10 minutes. In any case, clear. Therefore, Splice and Evernote for the reasons stated earlier. However, now it’s also your turn for the other part; what’s been the worst acquisition? And no, you can’t just say no, they were all fantastic.
No, no, because by definition, “worst” means the least good. Absolutely, I wouldn’t dream of it. Look, let’s say this: we make many errors, many blunders, we’re very imperfect. Among these imperfections are acquisitions that have gone worse than we hoped. There’s one that immediately comes to mind; I won’t mention the name out of respect for those involved, but it was an app that when we acquired it—speaking of acquired companies only at difficult times—was on an exponential growth trajectory, and immediately after we acquired it, but even before we had time to intervene, the number of users downloading it plummeted.

Yes, in that case, it was download numbers, how many sought and downloaded the app. Before this reflects on revenues, of course, there’s a time lag because all the active users and subscribers need time to feel it, but it’s an important indicator—this was several years ago—what we learned from it is that that exponential growth was primarily driven by a viral phenomenon in a particular geography. Specifically, if I remember correctly, it was in Indonesia, where it had essentially spread socially, so many people had started using this app tied to this social phenomenon.

And once that viral social phenomenon waned, naturally, the number of people looking for the app sharply declined accordingly, which significantly reduced the value we assigned to that product, and it turned out to be a rather mediocre acquisition that we would not have made had we known this fact. However, wanting to look at the silver lining, it did teach us a lot, and now we’re extremely meticulous in investigating all the traffic drivers of a product we buy; we want to understand who is searching for it, why, from where, to isolate any phenomena such as this and ensure the quality of the traffic we’re purchasing.
Yes, so it must come from healthy growth.

Yes, exactly. Or else we evaluate it less—meaning we could also consider it; we wouldn’t have paid as much as we did grand unless it appeared justified. Certainly! And is this still an app you have?

Yes, we still have it. It does just fine, but looking back, I absolutely wouldn’t do that same acquisition. Okay, that’s clear. Currently, the bulk of the revenue, if I’m not mistaken, comes from outside of Italy, right? I believe the United States represents around 55%.

Okay, Italy will be 2 or 3%. Perfect. Have you ever considered delocalizing, that is, actually moving abroad, or are there specific reasons for staying here?

Well, we still have people, as we discussed earlier, from various places worldwide, but the headquarters is in Italy, in Milan, and as I said, the predominant share of people is in Italy. So, there isn’t a particular reason for us to move, at least not based on where our clients are, because most—well, it’s all digital, and there’s no need to be situated in the same place.

Certainly, as we continue acquiring more products that serve large companies—like we acquired Brightov, which was publicly traded before and is now private because we bought it, which has 2,000 clients, all big companies—then it might be convenient to be in the same time zone, simply so you don’t have to wake up at night, or maybe you want to meet in person. So there will be situations where we might want to grow the organization somewhat where clients are located. However, historically, this has not been that important.

We’re in Italy, primarily in Europe, for two reasons. It was a very conscious choice, and many people don’t realize that we started in Copenhagen, Denmark. We moved to Italy after about a year and a half for two reasons. First, we evaluated that there were many brilliant and eager young people in Italy, but relatively few real job opportunities where they could be very ambitious and hope to build something really cool.

Thus, it was a win-win situation: we could build a stronger team, and those people could avoid the hassle of moving abroad if they didn’t want to do so while still having a stimulating career. The second reason was that we said if we were to fail, the place of failure wouldn’t change much to us, but if we managed to create this fantastic company of world caliber, doing it from a country like Italy, which has seen very few successes in the last 20-30 years, particularly in technology, would have a substantial value ripple effect in inspiring other entrepreneurs, maybe even companies that exist already, to be more ambitious, to make a leap in quality, perhaps initiating a small or even large economic and cultural revolution.

You look at Silicon Valley; it wasn’t always like that; at a certain point, in the early 1900s, it was a very agricultural place, not particularly futuristic, and then a series of coincidences led to the founding of Fairchild Semiconductors, which became the mother of the semiconductor industry, and from there, a chain of capital, know-how, and new businesses emerged, and that cycle repeats itself. Today, it is the primary hub for innovation and economics.

So, I’m not saying Italy will become Silicon Valley, but if we can be a great example, we might make a few more steps than we otherwise would. All these factors remain true today, just as they were back then, so we don’t plan to move our headquarters. Perfect.

The subject of going public is an issue. What? Look, we’re always asked about this; it’s discussed constantly, and I imagine there are some people who occasionally knock on the door saying, “Hey, I’d like to make an exit.” That has never been a problem because we organized, as I mentioned earlier, that we’ve raised $450 million in equity, of which almost half was $200 million secondary, meaning that shares changed hands.

We’ve always managed to find buyers for anyone wishing to sell; therefore, we’ve been fortunate enough to do well—and there’s always been strong investor interest. So, when someone wants to cash out, we help them find buyers. In the end, it is slightly more cumbersome than if we were publicly traded, but it’s not a significant problem. Sure.

The advantage of going public for us would be access to more capital with generally better terms; well, let’s just put aside that, it can indeed make a difference, especially in a highly acquisitive business like ours, where if we have access to more capital, we can invest at very high return rates as long as the cost of that capital is significantly lower than the returns we generate—it’s a significant accelerant.

The disadvantages are—it incurs even more onerous reporting; you have to disclose things that make it easier for competitors, of course. There could be significant media pressures. There’s a strong incentive to speak about publicly traded companies, and while it could be malicious, there’s an entire world of short sellers, you know, which one person would have you know, lately, going very badly.

But yeah, if Waters holds, they’re likely closing, so there’s a percentage of these who have no scruples and spread untruths about the companies to try to lower the price, and if you’re the company, you find the untruths turn into reality when people worry and call you. You have to manage that; it saps energy and time.

Then there’s the aspect of having a stock price that fluctuates over time, which can be highly distracting. It’s not easy to say, “Well, just forget about it, we watch it once a year.” Yes, it’s easy to say to others, isn’t it? That’s the problem. Exactly. So all these negative effects make it unclear what will prevail. As of today, we are very uncertain about whether to go public or not. We could; we have many proposals from investment banks to do it, and we are always evaluating them, but there is no concrete plan. If we were to list, the most natural choice would be Nasdaq. I would say that, and perhaps in second place, I might say the NYSE, so the New York one. However, if we really had to work seriously on an IPO, we would need to evaluate all options, and it’s not a taken-for-granted decision. Okay, but I mean, I would have been surprised if you had said, “Ah, you should list on the Italian stock exchange.” There are issues, and your response further confirms to me that it’s challenging to have a company listed in Italy, especially when it comes to attracting capital. Yes, from a technical point of view, it would be easy, perhaps even easier as an Italian company, but there are some extra complexities for us to list in the United States. Well, simply put, the multiples are generally a bit worse because the demand-supply ratio is slightly more unfavorable when you list there. It’s hard to ignore this aspect, right? Yes, definitely too important. Next acquisition? Just kidding. Um, but I don’t know. No, no. Uh, we have one that should close next week. Alright, we can talk about it off-camera, right? I want to wrap this up. So, we’ve been super concrete and I really appreciate it because it was exactly what I hoped for; you’ve been great. Um, but let’s close with a moment of inspiration, I think we also need this little moment of blue sky thinking. Was there ever a moment in your career where you thought, “Maybe I can’t do this, maybe I should stop, maybe I should give up?” And what kept you going? Obviously, because you are here. Well, I mean, the monosyllabic answer is “no,” but that’s not entirely honest. If you give me a minute, I’ll give you an honest minute-long answer—maybe even a minute and a half. I’ve never been close to giving up, but as a human being, of course, I work very hard like many of my colleagues. We have a lot of pressure, and it happens that I wake up in the morning tired and think, “To hell with this.” Yes. And I haven’t given up and do not plan to give up for as far into the future as I can imagine. Although, I don’t know about 20 years from now; who can tell? But I have no plans, no considerations at the moment, because there is a very strong sense of responsibility—first and foremost to my colleagues, and also to our investors and creditors, and to the 11 million paying customers, not to mention the 300 million active users. Anyway, I would like us to keep trying to create products that work well. However, the strongest sense of responsibility is towards my colleagues, especially since practically everyone has invested a significant part of their wealth and their earnings in company stock. If we were to fail, which I don’t believe will happen, I want to have no regrets; I want to have given my all so that I can say there was nothing more we could have done. Also, I’m very competitive, and I really like the idea of being part of building what we hope will be the most valuable Italian company in history. I believe we will make it; we’ll see. Let’s talk about it again in three or four years. I wouldn’t leave; it would be like leaving a team that is aiming to win the World Cup and has a real chance—no, you can’t; you have to give it a shot. Even if it’s exhausting; actually, the closer you get to that goal, the harder it becomes. But at the same time, it’s also increasingly stimulating. So, no, I haven’t been there; I’ve obviously had many moments of discouragement and non-clinical depression; you understand, more a sense of disheartenment. However, I’ve never seriously considered giving up, and I am not contemplating it at the moment. Good. One of our co-founders left in 2018, so it can obviously happen. Um, okay, Luca, I’m really happy—or rather LF, as I’ve learned you’re called here. Yes, yes, they shorten everything. So, as I said, I’m really happy and I thank you for your time and the attention you dedicated to your answers, which I believe is worth much more than just time. I hope you all appreciated it, and who knows, maybe there will be a part two. We’ll see. See you soon. Thank you.