The recent flurry around Bending Spoons pulling off an $11 billion valuation after scooping up AOL and raising $270 million shines a spotlight on a refreshing, pragmatic model in tech investing — buying up 'venture zombies' and turning them into cash cows rather than chasing unicorns destined for quick exits. It's a neat pivot away from the VC treadmill obsessed with hyper-growth at all costs, often sidelining actual profitability.
Andrew Dumont's Curious offers a vivid example of this strategy in action: buying stalemated startups with decent revenue but poor growth momentum, slashing unnecessary costs, and tweaking pricing to unlock immediate profits. This isn’t your typical buy-and-flip private equity hustle either; it's buy, fix, and hold — think of it as adopting the underdog with all the quirks but bringing them up to speed for the long haul.
Now, why is this so intriguing? Because it confronts a fundamental misalignment we've long witnessed where startups chase VC dollar signs for growth metrics rather than sustainable earnings. Dumont's point that investors often ignore earnings to prioritize growth aligns with what many in the industry silently acknowledge: growth without profit is a house of cards. It’s a model vulnerable to market shifts, and with AI-native disruptors on the rise, many older VCs-backed companies turn into ‘zombies’ — neither dead nor thriving.
Encouragingly, firms like Curious and Bending Spoons demonstrate a middle path, showing that innovation and pragmatism can coexist. Centralizing admin functions across the portfolio and balancing profitability with growth are steps toward a healthier software ecosystem.
But let’s keep it real — turning these 'venture zombies' into sustainable businesses is hard work, not a silver bullet. It requires sharp operational discipline and a willingness to ditch the glam of hyper-valuation for gritty, steady value creation.
For the tech ecosystem, this means rethinking success metrics and embracing business models that don’t just chase the shiny exit but build lasting, profitable companies. As AI and software landscapes evolve, maybe the best innovation comes from resurrecting the overlooked and reimagining what growth truly means. Source: Why ‘hold forever’ investors are snapping up venture capital ‘zombies’
