Bending Spoons: Bending the rules
The founders behind the eccentrically named Italian technology conglomerate Bending Spoons met when they were studying engineering in Copenhagen and spent three years and $1m attempting to get a diary app called Evertale off the ground.
When this failed, they took their remaining $40,000 and, in 2013, set up Bending Spoons, named for the central concept of The Matrix — that the mind can change what might appear to be the rules of reality.
In subsequent years the company has undertaken a string of acquisitions targeting struggling internet companies that have some sort of potential, gutting and rebuilding them with their legion of “spooners”, highly qualified young techies whom they inject into their acquisitions to revitalise them.
Unlike a traditional private equity model, Bending Spoons holds onto its acquisitions rather than loading them with debt and flipping them to the next unfortunate owner. Its Nasdaq IPO saw its shares rise by 40% on debut before settling down to a value of about $23bn.
One of its standout deals was the acquisition of note-taking app Evernote in 2023, after the app had struggled with a succession of management teams.
Bending Spoons piled in with mass redundancies, including the entire US workforce; rebuilt its underlying technology; raised prices; and changed the features it offered. As a result, new registrations started to rise, as did its customer retention rates.
The pace of its acquisitions has picked up in recent years; these include YouTube rival Vimeo and veteran internet icon AOL, both of which are ripe for reinvention.
Associated British Foods: Sweet goes sour
The genesis of ABF, the Weston family’s food-to-frocks conglomerate, came when Garfield Weston started investing in regional bakeries in 1935.
Subsequently, it picked up a portfolio of household names such as Ryvita, Ovaltine and Twinings Tea and expanded globally with about 138,000 employees in 56 countries and divisions covering retail, where it owns Primark, as well as grocery, ingredients, sugar and agriculture businesses.
The group is planning a demerger of Primark, which has never sat comfortably alongside all the other food-related businesses, expected to be completed by the end of 2027.
For now, however, the problem child for ABF is its sugar business, with deepening losses expected to come in at the wrong end of expectations, somewhere in the range of an operating loss of £25m-£60m. Next year is expected to be even worse.
The group has been affected by the Middle East conflict and the closure of the Strait of Hormuz, with higher gas prices increasing ABF’s refining costs. It has also struggled with subdued European sugar prices, as well as issues with its Tanzanian sugar mill and the impact of a potential devaluation of Malawi’s currency.
Primark, meanwhile, put in a solid trading performance in a generally challenging retail environment and is likely to be in good shape to take off on its own after the demerger. This will leave a widely diversified food and ingredients business that will always be a solid defensive play, even when one of the elements is struggling. The bottom line is that no matter what’s going on, people need to eat.
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