Bending Spoons IPO: Luca Ferrari on breaking a Nasdaq record, acquiring zombie companies with AI, and $4M revenue per employee

that grows with your business and lets you sell in seconds online, in store, on mobile, on social, on marketplaces, and now with AI agents. Uh, good news. We got to do Canada Day Canada deep dive. I'm glad we got one Canadian on the show. But up next, we have an Italian, Luca Ferrari from Bending Spoons, the co-founder and CEO. Luca, how are you doing? Welcome to the show.

Hey guys, nice to see you. Thank you for having me.

Thank you for coming back on such a great day.

Great to have you back.

How's it going? Where are you at mentally? Are you relieved? Are you excited? What's it like?

Just another day, John. Just another day.

I'm I'm exhausted.

Okay.

You know, I'm an I'm an extreme introvert and there's nothing worse for an extreme introvert to do a road show uh than a media day.

Well, we appreciate

Well, we can just hang out. We'll keep this we'll we'll keep this casual. We'll pretend it's just the three of us catching up.

Um

yeah. What uh how was your approach overall? We had um when when Clarna did their IPO, it was literally they had a handful of people on the team. I think it was like sub 10 people.

They dropped into the stock exchange. They they did the IPO and they and they just they left like you know the next day. What's been your what's been your approach over

because it's a company building moment. It's a celebration, but also it can be exhausting to fly a whole bunch of people around the world if you want to do that.

I think we've we've done probably the opposite. We NASDAQ told us that we broke a record by bringing over 500 people. Pretty much everybody who could fly on nothing.

That's awesome.

No, it's been wild. I mean, look, we are a very competitive group and we're already

if possibly even more motivated than we were before, but

at the same time, it's it's good to pause for a second and and acknowledge the this milestone. It's not easy. So, you know, happy for it, but also just hungry to show that this is just the beginning.

Yeah. What was the oneliner that resonated on the road show most bankers and investors who are trying to get their head around the company? I mean the financials, okay, good. So that helps

when you double the company pretty much every year for for as long as I can remember that that goes a long way uh getting people to to like you. No, I mean jokes aside, I think the

you have to ask the investors. Every person is different. In my opinion, what people liked about us is a combination of a a technologically advanced platform uh where everything is highly integrated. We're pushing AI to its limits which is obviously the promise for the future and how companies get to be run. Um and at the same time a track record that shows a combination of we are willing to uh make aggressive moves uh whether it's in acquisitions monetization but at the same time we invest just as aggressively uh and in a far-sighted manner on on product having you know added a ton of features brought innovation to product that sometimes

hadn't seen it in a long time. So that combination I think is unusual and the and we see a huge pipeline of acquisitions out there. So I think that that was quite resonant with the at least the best investors.

How crazy is this as a reason to be excited about what you're doing? A lot of the companies there's a lot of fear around AI disrupting uh tech companies but a lot of the companies in your portfolio have survived the

mobile apocalypse and the cloud apocalypse. And so you have a number of of of organizations and and brands that are just resistant to sudden disruption from the new hot thing in a way that a company that was started in the pre-Chat GGBT era might not be quite equipped might still be in the hyperrowth but then there's a newer thing whereas a lot of your companies have maybe more resiliency built in just by virtue of the fact that they are maybe over five over 10 years old at this Is that realistic?

Absolutely. I think the I don't think we have any significant business that's uh that hasn't been around for at least 15 16 years. Uh

on the one hand, you know, they're not going to go to the moon, you know, uh which is bad. I'd prefer it to be the case. But but on the other hand, yes, they've gone through so much and the customer base is uh is so self- selected at this point. Yeah. Uh it's a huge advantage. you when you bet as a VC for example on a fast growing company uh of course that's exciting but also you need to believe that growth will stay that company typically is the you know end of one offering that product or that product in that way so as competition uh comes up you don't know what's going to happen you haven't seen it happen before but for AOL or Eventbrite or Vimeo we have seen it all like they've had basically they've lived in a perfect competition kind of environment for a decade plus so plenty of clones emulators of those kinds. So, you kind of know what you get and there's value in that for sure.

Yeah. Um, are you getting calls from VCs who are trying to offload shares or whole companies of zombie corns? There's a article in the Economist this week about zombie corns, companies that were valued at over a billion dollars and uh have not raised an up round in years. Uh, what kind of deal flow is getting pushed your way? And then what are you doing with that deal flow? Is it interesting or not? Yeah, look, we we we look at every it's like you got it. I mean, it's a particularly good time for a serial acquirer. There's a bit of dislocation uh fear fear due to disruption from AI which I think has a lot of truth to it in many cases. Uh it's a bit nuanced but um and we can only do so one of the disadvantage disadvantages of our model where we almost rebuild uh some of these business from the ground up. We try to keep everything that's great and rebuild everything that's less great. It's I mean the good thing is I think it's much more challenging and interesting than than going a little bit more shallow and also it's delivered very high returns but but at the same time you can't do it a million times a year. It takes a lot of time a lot of effort from a big team of engineers, designers, product managers and so on and so forth and so we have to be very selective. So yes it's a good time with a lot of opportunities but equally we we can only do a few. So, uh, the key is, you know, listening to what's available, the opportunities, but also not get too excited. Stay patient for the right one.

Yeah. More than 50 deals done.

Yeah. How much of an advantage is is being public going to actually give you in in net new acquisitions. I imagine a lot of acquirers are going to be uh you know it's potentially a lot more compelling to get you know if they're going to sell to you to get um you know depending on whatever the cash equity debt split is to actually just have exposure to something that they feel like can compound while having access to liquidity.

Sure.

I think I mean you may be right. We will see. Of course it's you know day one in that regard so I don't have a track record. Uh we we chose to go public primarily to improve our access to debt. It turns out that lenders really like lending to private public companies, better regulated, more externally transparent. They like valuation, all things a lender loves. And you know, historically, if you look at our the capital we have deployed, it's been um like 80% directionally uh from debt and like 15 20% free cash flows. Um, so it's important for us to to have access to uh that dollars and and cheap that that if possible and this should help on the margins a little bit. Um, but yeah, I I think you're right that we may find opportunities that uh wouldn't have been available to us uh had we stayed private. Do you think any of that new debt market access might unlock sort of like a white whale acquisition, some mega deal where you're taking down a company that it fits the thesis but is much larger than anything you've done in the past? Look, I I would say I believe that as a good strategy is predictable to some extent and our you know our predictable strategy is do three, five, eight deals a year of uh uh relatively speaking the same scale more or less and it's going to grow as we expand. But uh but yes, that's an upside. That's a cherry on the cake. That's uh you know, I'm sure that in time some something like that will happen and we'll try to move quickly and seize the opportunity. So yeah, possible, likely no, possible, yes. I think if you look at uh this over enough, you know, long enough a period of time and it's almost guaranteed to happen before later.

Yeah. What Oh, sorry, Jord.

Do you think uh how how do you how do you think about people's like nostalgia around software products in general? I feel like uh we were talking with Scott Galloway yesterday for his podcast and he was saying that he's quite excited about Bending Spoon specifically because he was like they're great brands that people have like positive association with and uh in fashion everything that's old and uncool eventually becomes cool again right I would say like uh you look at an an example of you know one of the hottest brands in the world chrome hearts right has gone through periods where it wasn't the hottest thing uh but then it you know and these things go in cycles. So, like I can imagine a world where 5 years from now every Gen Z kid is like, "Oh, of course I'm using AOL." Like, it's like it's like, you know, it's like vintage and it's like cool and nostalgic and like the and so I can imagine like at some point uh and it feels like software is going the way of of of fashion where it's like fashion, you know, it's very easy to make a new fashion brand, right? like it's it's very easy to go compete with a Gucci or or a legacy brand, but um but there's some there's just brand value is like a real thing. Do you see a potential where where you see a reaceleration or or renewed cultural relevancy in in any of the brands and or is that not something you think about at all?

I I would say it's possible. It's not something we would embed in a business case. We we we we're kind of math, science, and engineering people. We look at the numbers and try to make sure that we base our capital allocation on uh assumptions that we can be close to certain about. Uh and I would say what you just described is plausible but does it happen when it's so again you know maybe we'll try to make these products uh

better to the best of our abilities and if that helps uh ignite some of that we'll you know we'll be incredibly happy but even if it does our investment thesis does not hinge on on it. So

yeah, I mean certainly could be true for Vimeo. The community there has always been uh very culturally different and like anti-brain rot. You don't have a lot of like YouTube style slop on there.

Yeah. I I associate Vimeo with like quality

film making and it's still right like when I think about my favorite surf movies growing up, they were always always there. Snow, you know, snowboarding, all all these different kind of niches I was into. Like the quality was

going there. Um what

by the way on that one quickly I I I I agree we have uh some surprises in store for for that community on be there's they've they've I think that they've been uh a bit frustrated over time whe I I can empathize with the direction has taken which is it's been more like enterprise and it makes sense I mean but

we'll see whether we can do something for them that they like Um uh I don't know if that will turn out to be a success but yes I I I do think there's potential there for sure.

Yeah, a lot of people have fond memories. Um on uh on AI we've seen a lot of engineering organizations sort of like take out the biggest hammer.

Wait, are you talking about advanced Italians or artificial intelligence?

Artificial intelligence. I know that you deploy a lot of advanced Italians, but I want to know how you're deploying artificial intelligence. Uh, obviously your operating team is fantastic, but I imagine that your operating team is also fantastic at making sure that you're not token maxing and overspending that you're if you are using a coding agent, you're using it judiciously. What have the learnings been? Have you been on as much of a uh as a as much of a roller coaster ride as some of the bigger tech companies? We've seen headlines out of Uber where they spent so much token maxing they spent their whole budget then they had to pull back. There's been these back and forths. What's your journey been like at Bending Spin?

Yeah, totally. So, but by the way, we have more people in the States than in Italy, I think, because we're based in Italy. It's a little bit like it's it's it's unusual and so it's cool that in the Italians or what not. And I'm I'm Italian, but yeah. Anyway, we've got a bunch of Italians. That's true. But not just Italians.

Sure. Just as many Americans.

Just to be clear. Um, in any case, uh, yeah, AI, I mean, almost nobody knows that my co-founders and I had an AI startup in 2010. Massive failure. Uh,

and we raised a million dollars, which at the time felt like a lot. Today, it's basically, you know, like nothing.

No, that was a lot. So, Demis in 2010 raised$2.3 million at a five cap.

Yeah.

So, like that's and that's like the most elite AI scientists in the world at the time.

Yeah. That was the market. It did much better than we than we did at the time on AI. I'm sure is more competent on AI, but we I mentioned it because it's certainly something my coounders and I have been passionate about and try to use as much as possible in the business. We've had it as part of our proprietary technologies for almost a decade. I think 2018 certainly we're using machine learning.

Um so, so yeah, we push it pretty hard. We we actually don't have any limitations on using AI at the company. We encourage everybody to push uh the envelope there, but we have very limited cost. And the reason why we have very limited cost is that we have developed a ton of uh models in house. It turns out that if you have very good people, you can build narr. They're pretty dumb in general, but they can do that one thing pretty well

and they're very cheap. They're self-hosted basically. I mean almost free just a little. And then you know there are good open source models you can fine-tune combine. Again, um they may not be as good as the frontier models, but if you use them intelligently, we have built our own uh AI orchestrator that will help us make sure that uh for each task we're using the you know models that are optimal in terms of cost quality. We don't end up using the frontier models for a whole lot. Yeah. Just either the more complex stuff or supervision of uh uh of more dumb models. And with that we we are pushing pretty hard on AI. We're last, you know, as per our disclosures, we are over 90% of our code being written by AI and uh pretty modest expenditures. So, we're pretty happy there.

That's yeah. Yeah, that's fascinating. Um, what how do you see the the footprint expanding uh for the company post IPO? You mentioned that you have a lot of employees in the United States. Do you expect to uh spin up more offices, go more regional, uh centralized, decentralized? What's the thesis there? I think we'll I mean the the the trend is one where we open more offices and uh also ultimately our our basically a key way we we do well is by by creating this core team of exceptional people

uh giving them a lot of responsibility, powerful tools and a culture that helps them be a little bit better than they would otherwise be. And uh and sometimes we we acquire companies that have failed to attract some of the best for a long time. Not for anybody's fault. Like sometimes management teams are great. It's just that if the brand is not as appealing, you just don't attract the right applications. And so we we we we by injecting some of that talent, we help reinvigorate those organizations, bring back that we call it startup mode, you know, high talent density, more intensity, ambition, innovation. Uh and and basically we look to to hire as many great people as we can and from wherever they are. uh historically just out of you know like simply where we were based and are based it was like Milan, Italy and then London and now again the states and and Madrid in Spain, Poland anywhere we can find great people who are excited about uh what we do using tech to reinvent how businesses are run and take a lot of responsibility much earlier in their careers than would appear reasonable. I think that's us. Uh so yeah probably more locations not fewer locations going forward. Makes sense.

What uh do you track average timelines from first conversation with a management team to to close? Like I imagine there's some companies that you've acquired where you're talking for for years and they're not really ready yet, but then the moment comes and then you can move really quickly and then others where it's like you have an opportunity to do a deal in, you know, six weeks.

Yeah, we've seen both. I I'm sure we track it. I'm not I don't I I don't have the the data off the top of my head, but we have had cases like that. We we want to be an excellent acquirer like like I'd like ideally a 10 out of 10 reputation where you know super honest, super reliable, good price, fast and uh and it starts with establishing a good relationship with with founders, owners, boards. Um uh I I I'm actually I think our ability to do that has surprised me in a way because you know we're so active that you could imagine my assumption was selling to someone who's so active and rebuilds parts of your business can be a little bit more difficult than selling to a more passive investor. But it turns out a lot of founders see us as the preferred partner because number one we never sell. So you know exactly what you're getting into like it's bendy spoons and it stays there for decades forever probably. Uh also people appreciate that uh we invest for real in these products. They they keep expanding and improving and often founders see that as their as their legacy and they they like to know that you know technical people product people will continue to pour uh love and effort into their babies. Uh and I think we have a good history uh in that regard and also uh we you know we we have we're super flexible. So if if say a founding team wants to to to depart two weeks after closing because they feel that their their time there is is done and move on we they can do that and many more financial acquirers would ask you to stay for three years and roll over equity and that can be pretty difficult after you know you ran that business for 10 years 15 years and now you've got to stay there essentially taking direction and so yeah and so that's you know that's what we find they like but also it starts with the with uh with meeting and and spending time and getting comfortable with each other much earlier than the transaction takes place. So yes, absolutely. We've had cases where we have known each other for two years and then the company felt ready and we and we got it done.

There's so many companies that I would love for you to own. I hope that you do in time, companies that are you're now quite a bit bigger than in uh the public markets. So um

I have one last question. Uh, is AI speeding up deal making specifically on research, spreading comps, getting to valuation, legal diligence? Are you seeing AI bleed into your deal making

a little bit? It's not really a major area of efficiency for us because ultimately we only do five say five acquisitions a year get like order of magnitude.

So it's not really there that we unlock a lot of value. where I think it's helping us tremendously is by enabling us to do more acquisitions uh and so scale the the like the operational side of things after we close the transformations running these companies because that's really a bottleneck to to to growth um and uh and and then we have seen major improvements there we went from the KPI we we think ultimately is the best proxy for our productivity of that core team we call we call we call them spooners is revenue per spooner and then went up from about a million dollars in 2023 to roughly $4 million round.

Let's give it up for the Spooners.

That's fantastic. I love it.

So, yeah.

Well, thank you so much and congrat.

What an incredible moment. I'm so happy for you and the and all all 500 of you and more uh really really

too many more successful deals.

Have a great rest of your day.

Thank you guys.

Good luck to you.

Great to see you. We'll talk to you soon. Let me tell you about

Figma agents mean the canvas. Your AI agents can now create and modify your Figma files with design system context. Did you see what Riley Walls shared? He shared a a heat map of the most popular types of dogs in San Francisco. The city is dominated by Chihuahua. It's overrun by Chihuahua apparently. I had no idea. It's the capital of

explains

Chihuahua apparently a lot. There's some Labrador Retriever hot spots. There's a couple golden retrievers in the city. There's a little area where there's a lot of poodles.

What do you guys think about pit bulls? Are you pro pitbull?

Um, not my favorite.

Not around me.

Not my favorite

or anyone I love.

Uh, skill issue. Just learn to wrestle with the pitbull. Just exert your your humanity over it and put it.

Are you a big pit bull guy? You like pit bull?

No, not a big pit.

What about Mr. 305?

I like uh I like a golden retriever. That's my that's my dog. Even though I have I like New Finland. But

Bending Spoons opened at around 3029 $31 a share. It's now at 40. Nice little pop. Bill Gurley in shambles.

A very modest pop. He only gets mad when it's like up 2x or 3x. Uh 40% pop. Not too bad. Not not not probably probably we we probably will not get a post from Bill Gurley about this one.

Luca is clearly just an absolute animal.

Yes.

Like he's just like a guy who's just going to

he's got the blinders on. He's going to just keep executing the strategy. He's going to own every iconic American company in time. Running them out of a castle. He's everything.

He's clearly like he's clearly like seven. He's clearly 50 years. I will clear he's clearly drooling over Snap. You know that every day he's just is texting.

No. No.

Like you up sell now.

No, but I mean that's the kind of that's the kind of like I would say in the fullness of time Spiegel is obviously happy running the business, but um that that to me would be like a But social networks and network effects businesses seem uh uniquely durable in the long term. Uh and I wonder if that's where they'll get into next. A lot of these businesses have recurring