The Neon Show
00:01:10 · Siddhartha Ahluwalia, Luca Ferrari
[00:01:10] S0: How much you would attribute timing and luck to have played a role in your success? [00:01:15] S1: I came up in this tiny village, as I mentioned, in the Northeast Of Italy. 900 people lived there. My parents were hairdressers, and nobody in my family had gotten, say, university degrees. My horizons were pretty small. I believe if if you had asked me when I was, say, 12, 14, 16 what being entrepreneur is, I probably had heard of the word. I didn't even know [00:01:35] S0: what it meant. And what are your views from an external builder about India? This is the first podcast that I'm doing outside India. I'm, like, traveling outside India to record it. Right? And the first episode of Neon Show, right, probably, which is, like... We have done podcast with folks outside India, which are, like, through Zoom calls, which you can see, but I'm traveling first time. So so excited to it. For audience again, this is Siddhartha Ahluwalia. Super, super excited to have this episode of Neon Show with you. I'm your host and also founder of Neon Fund, a b to b SaaS fund that invests in seed stage enterprise SaaS companies coming out of India building for the globe. I have here with me Luca, founder of Bending Spoons. Luca, I can't tell you how much excited I am to do this podcast in Milan today at your office. Thanks to your amazing team for setting this up. Really glad to be doing it. But for audience, you know, I would like to start by, you know, if you can tell us more about yourself, more about Bending Spoons as an intro, and then we can dive into specific areas.
00:02:47 · Luca Ferrari, Siddhartha Ahluwalia
[00:02:47] S1: Sure. And thank you for being here and for, wanting to to do this with us. It's, it's our privilege and pleasure. And, of course, welcome to to Italy, to Milan. We're happy to have you. And we don't do this often, but, I think it was fun for us to arrange, for this recording. As as for what concerns myself, well, you said it. My name is Luca. I have a background in engineering. I come from a tiny village in the Northeast Of Italy. And I'm one of the co founders, currently the CEO at Bending Spoons. Bending Spoons, we are a technology company with an unusual approach. Rather than launching products from scratch. We have built a platform, technologies, expertise, talents, company culture that's fully optimized for acquiring digital businesses where we see some untapped potential and then trying to run them a lot more effectively and efficiently. And we do so with an incredibly hands on approach. So we're far from a passive acquirer. We will try to rethink the product, the technology, the marketing, the organization, pull every lever we have available to make that business better. So an unusual combination, I'm not aware of any businesses quite like Bending Spoons. We've been doing this for a little over a decade. Our products served over a billion people. Currently we have around 150,000,000 monthly active users and many millions of customers' revenues in excess of $600,000,000. [00:04:28] S0: That's The the revenue is in excess of $600,000,000? Yes. Wow. So you're already like a public company scale.
00:04:28 · Siddhartha Ahluwalia, Luca Ferrari
[00:04:28] S0: That's The the revenue is in excess of $600,000,000? Yes. Wow. So you're already like a public company scale. [00:04:36] S1: Well, you tell me. We are proudly held at the moment but I guess maybe at some point. [00:04:43] S0: Yeah. And you have raised very little capital and the capital that you have raised is very recently, like in the last twelve months. Right? [00:04:50] S1: Yes. So up until the summer of twenty twenty three, we had never raised any significant amount of equity. Then last summer we raised about $50,000,000 in equity. Overall, the round was a little bit bigger, but there was a secondary component to it too. And then again, earlier this year in 2024, we raised a little over $150,000,000 in equity again from institutional investors. [00:05:23] S0: And what would be the company valued today? [00:05:26] S1: Well, the last round earlier this year, it was a little over $2,500,000,000 Today, we'd be worth more than that. But you know, the order of magnitude. [00:05:36] S0: Yeah. But but let's say giving it a fairly on an average 10x revenue multiple, you would be valued if you were a public company today at 6,000,000,000.
00:05:36 · Siddhartha Ahluwalia, Luca Ferrari
[00:05:36] S0: Yeah. But but let's say giving it a fairly on an average 10x revenue multiple, you would be valued if you were a public company today at 6,000,000,000. [00:05:45] S1: I think we'd be valued more as a public company. But when you... So valuation is important when raising capital, clearly one of the most important things, not the only one. And I think the smaller the dilution, the more important other factors become. And although in absolute terms $150,000,000 is a substantial amount of money, of course, relative to our scale it's not a tremendous amount of money and so we prefer to keep valuation more moderate privilege selecting certain types of investors and making sure certain terms when it comes to governance were in place. We believe this favors the company and our share owner base at large with a long term view. Even if valuation could have been a little bit higher had we pushed for that as a primary objective. [00:06:40] S0: And what were the profits of the company today? Like, and you have been profitable from day zero. [00:06:44] S1: Yeah. We we don't disclose that but in the hundreds of millions. [00:06:49] S0: Wow. So essentially you never needed any external round of funding I would say.
00:06:49 · Siddhartha Ahluwalia, Luca Ferrari
[00:06:49] S0: Wow. So essentially you never needed any external round of funding I would say. [00:06:55] S1: No, we have used debt, pretty straightforward bank debt quite a bit. Never to extreme leverage ratios normally up to maybe three times at most, I would say. By the way, think we should have done more of that and we will try to do more of that in the future but talking history here. So that has been an important catalyst of growth and then naturally reinvesting our earnings into the business. [00:07:26] S0: Got it. And I believe you have not yet touched your forties yet, right? You are still in your late thirties. [00:07:31] S1: Yeah. I think anagraphically I am 39. [00:07:34] S0: Yeah. [00:07:35] S1: I I did choose not to get older a few years ago. So I'm I'm 28 on... Like, if you ask me, but I I was born thirty thirty nine years ago. Yeah. [00:07:43] S0: You got it. And how did you manage to do that state already? [00:07:47] S1: No. I I mean, I'm just joking, but I I don't mind getting older. But Yeah. Yeah. I'm not as energetic as I was fifteen years ago. [00:07:55] S0: Yeah. But but what I'm trying to say is you still have like twenty years more of building bending spoons. That's a lot of work. And, essentially, the the model that you have. Right? Most founders, what they do is when they start one company, they scale it, take it IPO, and then they say, I want to do another thing. But you can do the same thing inside Bending Spoons because your model is like that. Whatever you want to do, whatever... Yeah.
00:07:55 · Siddhartha Ahluwalia, Luca Ferrari
[00:07:55] S0: Yeah. But but what I'm trying to say is you still have like twenty years more of building bending spoons. That's a lot of work. And, essentially, the the model that you have. Right? Most founders, what they do is when they start one company, they scale it, take it IPO, and then they say, I want to do another thing. But you can do the same thing inside Bending Spoons because your model is like that. Whatever you want to do, whatever... Yeah. [00:08:23] S1: I don't think I'm I'm attracted by Verizon that way. I'm more attracted by trying to contribute to say one masterpiece, make that my contribution. I'd rather that being the best it can be rather than making multiple less remarkable presumably contributions. I could see though if I felt stuck like that we failed to achieve we wanted to achieve and there was no way out, then I would perhaps have that sort of mindset. In a way maybe that was how I felt with the startup I contributed to founding and running over a decade ago where well, we failed so there was no other way but to restart as a separate project. In that case as much as I would have preferred for that one company to be my life's work, of course, had to to try something else. But if I have a choice, I'd much rather keep making Bending Spoons better for the longest time I can. [00:09:32] S0: So so essentially there is no scope of you starting any company ever again another company.