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Businesses Technology

Private Equity Hipsters Are Coming for Your Favorite Apps (bloomberg.com) 37

Posted by msmash from the closer-look dept.
Italian technology firm Bending Spoons has emerged as an unconventional private equity player, acquiring struggling tech companies and dramatically restructuring them for profitability, most notably with its purchase of note-taking app Evernote.

The Milan-based company, valued at $2.6 billion, has acquired six companies since 2022, including WeTransfer and Meetup's assets. CEO Luca Ferrari has told investors the company could deploy up to $2 billion for future acquisitions. Bending Spoons typically targets subscription-based software companies with steady cash flow, implementing steep price hikes and significant staff reductions post-acquisition.

At Evernote, the company dismissed over half the workforce and increased annual subscription costs by 63% to $130. The strategy appears to be working. Bending Spoons reports annual sales have surged to $700 million from $162 million in 2022, with Evernote turning profitable earlier this year.

Private Equity Hipsters Are Coming for Your Favorite Apps More | Reply

Private Equity Hipsters Are Coming for Your Favorite Apps

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  • Keep your corporate apps. They suck anyway and rent seeking won't make them more attractive.
  • Is that professional for a headline for a news aggregator?

  • Slaughtering cash cows for profit (Score:5, Informative)

    by silentbozo ( 542534 ) on Monday October 28, 2024 @03:11PM (#64900701) Journal

    This is what corporate raiders do (I refuse to call them private equity or activist investors).

    They look for products with dedicated user bases, recurring revenue, little or no competition, and then they buy them (often using leverage - by using the company itself as the asset), and then they squeeze them dry.

    They axe research and development, raise prices, cut corners on manufacturing, culminating in moving production lines overseas or stopping production entirely - and then just licensing the brand name to slap on cheaply made crap.

    They squeeze as much cash as they can out of the company, and when finally it is about to die, they embalm the corpse and then put it up for sale again.

    It is amazing that anti-trust regulators will stop two companies from merging to prevent anti-competitive behavior, but will allow corporate raiders to destroy viable companies and their associated constituencies of workers, communities, and customers. You can't even say they're doing the right thing by shareholders because not everybody wants the short-term payout - a good stable company can generate revenue for decades, but raiders (like VCs) want their payout within a 5 year timespan.

    They're literally killing the golden goose because they don't want a steady recurring stream of revenue - they want as much as they can now so they can find their next victim to plunder.

    • According to the summary, Evernote was not a cash cow nor a golden goose. It was losing money. That was going to stop one way or another, and sitting there in slow decline waiting for paychecks to start bouncing is not a good way.

      • Re: (Score:2)

        by Rujiel ( 1632063 )

        "and sitting there in slow decline waiting for paychecks to start bouncing is not a good way."

        This is a weird false choice you are offering. Is it somehow better for an employee if they're axed tomorrow after a vulture capital form's purchase, vs. still getting paychecks for a while at a failing company company? Is it better somehow if a Mitt Romney type just clears the table and takes everything?

        • As you mentioned, it was a false choice.... But yours is no less false.

          Is it somehow better for an employee if they're one of the ones that aren't axed at the now viable business?

          I think the answer is- there is no universal answer.

      • They could have done some stuff to get a greater audience than what Evernote has now. These days, I don't see people bothering with Evernote, and either are using MS OneNote or Notepad++ on the Windows side, the Notes app on the Mac side, or a similar notes app on the Linux side.

        Evernote had an opportunity to be relevant, especially multiplatform. If they had end to end encryption, ease of use across platforms with native apps, timestamp based syncing, as well as some robust way to handle sync issues (per

        • Evernote could have done well, had they did things differently, but just like any company that gets raided, it winds up in the ashbin of history

          Since they failed to do the things you describe for many years before getting raided, it seems you're reversing cause and effect.

          Some private equity firms are more successful than others at actually revamping instead of just capitalizing on whatever is left of a dying company. Look at Dunkin Donuts. Bain bought them in 2006, revamped the company, went public i

    • This is what what the mob, Mafia, la cosa nostra, did in the 50's, 60's and 70;s. They would buy a business like a restaurant, a store, what ever, squeeze the shit out of it by charging up and maxing out the credit for the businesses ability to buy things, then sell the "things" on the street. When the business collapses, they torch the building, collect the insurance and walk away. This was known as a Jewish Fire. My dad was an insurance adjuster in the Chicago during the 50's, saw this all the time.
      T

  • I'm sorry, my internet must be glitching out. It sounded like you said I had favorite apps? But that can't be right, because people don't like apps, they only like webpages. Can you say that again?

    No, I heard "apps" that time, too. Stupid internet. I'm gonna call my provider.

    • Re: (Score:2)

      by Merk42 ( 1906718 )
      App, webpage, doesn't matter. Either way it requires a subscription.
      • Lol, who pays money, once a month, for a notepad app?

        • Re: (Score:2)

          by Merk42 ( 1906718 )
          Enough people that "annual sales have surged to $700 million from $162 million in 2022"

          • I'm assuming there's some form of lock in.

            Either that or a lot of people are going to be very surprised the day that they finally actually look at their credit card statements and start wondering about the recurring charges that they've been paying all this time.

            The other possibility is that these are corporate customers where they've just been paying for licenses and someone hasn't throw up enough of a stink to force people to migrate so they can stop paying for Evernote (users aren't paying out of their o

  • The company name doesn't exactly instill confidence.

  • Private Equity Hipsters Are Coming for Your Favorite Apps

    So, is "hipsters" how we sanewash what all these greedy private equity firms that take over everything (houses, hospitals, vet clinics, etc.) to milk it for all it's worth are doing now?

  • Paying a 130/yr subscription for evernote? It’s not like there’s a lack of good note-taking apps out there..

    • apparently putting your .txt files on Somone Else's Computer

    • Re: (Score:2)

      by deKernel ( 65640 )

      Personally I was quite happy paying $40'ish a year for the ability to have the information available on multiple devices concurrently. Now I would have even gone as high as $75/year, but when they went to $130/year...I was gone. The price for me as an individual was just not worth it.

      • Have you tried nextcloud? Not perfect or effortless, but works for me.

        • Re: (Score:2)

          by deKernel ( 65640 )

          I moved to Obsidian because they had a nice import process from Evernote. The UI is not as user-friendly in my opinion, but it does the job. The one item that nags me is the searching feature. It returns all hits within documents as well as the document itself so the results are pretty busy, but I am betting I can change the results to only return a reference to the page itself.

  • These are companies that make shit revenue, they are so bad: 1) They cant go public with a bunk business model. 2) Other tech companies wont buy them with a bunk business model. PE is just cleaning up the garbage, at least their employees have a chance to keep their jobs.
  • also since when did Hipsters have that kind of moolah?

  • Don't get buried balls deep in any app, program or data storage you don't actually own. When your needs and your wallet are connected too directly, there's always going to be someone who will see dollar signs and take full advantage. Basically, when you subscribe to a service, you're giving the owner a license to commit extortion.

  • that used to be open source, its gone from f-droid because the developer sold it to an advertising company and the new version can be found on google playstore but now it spamms users with banner advertising, glad i kept the old version and i have kept the apk installer just in case i need to reinstall it

  • same thing bought out by Outdoor network, price trippeld while quality went to shit and they're trying to throw in some social media junk into it. My renewal this year before I canceled my sub was almost $80/y cdn when I got it for like $30/y back in 2020.

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