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!
Max Quinn
3mo
Evernote went from one of my most used apps to a graveyard of awful UX, relentless upgrade popups and payment plans that seem to have changed every time I muster up the courage to open it up, so let's hope that's not indicative of WeTransfer's future.
don't you know if is there a list of people going to be fired? or something like that
Marcel Hageman
3mo
Just to hop on with some advice to those who might find themselves in the firing line: Firing people is an expensive undertaking in itself. Especially good performers with permanent contracts. I genuinely hope for all of these people to band together and get proper legal assistance throughout the process, because "pennies on the dollar" is usually their first proposal. Even if their termination compensation sounds good, you're just sponsoring someone's next yacht's upgraded pillows. Remember, companies are not friends. Especially after a takeover and during a firing round: they are literally your worst enemy trying to pressure you, trying to force your hand, and making your feelings into their plaything. Get legal assistance. In the Netherlands, it’s common for your legal counsel to invoice the company for up to €3000, and some operate on a no-cure-no-pay basis. Also, remember: even if you sign a VSO (termination agreement), by law, you have two full weeks to reconsider and revoke your decision—though you can only do this once.
Filippo Tafuri
3mo
Seems like BS became a VC firm ultra leveraged that is just able to buy other companies, fire the employees, and with an interview process that neither Google has. I see it as a big bubble that now or later will explode and Italy shouldnt promote the growth of such companies from its territory.
Simone Basso
3mo
Bending Spoon is fundamentally a Private Equity specialized in Tech. Great for them as they are very good at executing their well tested strategy. Most of the companies they acquired would have not survived long without a reboot.
Simon Bainbridge
3mo
I'm not sure that WeTransfer invented anything new, but it changed the game in making file transfer truly user friendly, and even fun to use. And it certainly knew its market. As a tool, it's hardly unique. But the circus it created around the product was highly developed and attuned to its customers. Without that, I doubt the sub base will react kindly to being squeezed, as they can easily go elsewhere. If bought cheap enough, I guess the new owners can bleed a slowly diminishing sub base with minimum costs until it's no longer viable. But as many users are in the creative/content space, they're likely to hold it against the new owners if the cool editorial (in the guise of support) gets turned off, and jump ship quickly. As someone in the editorial market, it's worrying to see another content-forward company abandon the editorial approach. Should that be a wake up call to those of us who have assumed almost everyone would get on board with engaging customers, or are brands being shortsighted chasing the bottom line?
Sam Gilmore
3mo
Thats nuts that WeTransfer bloated to that many staff. They need ten people.
Carl King 🎲
3mo
lets hope some of those lost employees set up a rival company and make Bending Spoons regret their action by undercutting their services
Put Trust to Work | I help organisations, teams, and executives create new value through relationships. Rally everyone together, to enrich employees and customers, safeguard our world, and turn a profit.
3moYou raise a point about value, and values. If we believe that only financial returns matter, and that products are a means to that end, then we act as Bending Spoons has done. If however we believe, that, for example, promoting artists and culture is a form of value (as you say happened at WeTransfer), then Bending Spoons has acted on a reduced and benighted understanding, and caused harm. Under this wider understanding, to employ people is, within reason (!), likely considered a social good and thus may be said to be a form of value. In a world where human folly is amplified by dumb machines (think AI), reduced notions of value will be very dangerous. If the world is not to run headlong into dystopia, companies will have to start valuing something beyond shareholder return. And, given capitalist markets, this means that customers will have to value things beyond convenience and low cost (the mantras of AI pundits). Simone Basso and Daniele Scillia – my guess is it will be hard to agree on this one, for the reasons above. Very useful write-up Gregory Witek, thank you. May be of interest John Hibbs Andrew Ellis, FRSA.