[Edaily Marketin YunJi Kim Reporter] Berkshire Hathaway, led by Warren Buffett, has placed a bet on an Italian company that has grown by acquiring internet firms in decline. Some analysts suggest that the company’s business model—which prioritizes stable cash flow over growth potential—aligns well with Berkshire’s “value investing” philosophy.

According to local industry sources on the 16th, Berkshire Hathaway recently decided to invest an additional $330 million (approximately 441.9 billion won) in the Italy-based company Bending Spoons. Combined with the $600 million invested when Bending Spoons went public on the Nasdaq last July, Berkshire Hathaway’s total investment amounts to $930 million (approximately 1.2454 trillion won). With this investment, Berkshire Hathaway will secure a 4% stake in Bending Spoons.

Founded in 2013, Bending Spoons is a company that focuses on acquiring internet firms that once dominated their markets but have lost their growth momentum due to intensifying competition and other factors. Following its acquisition of the note-taking app Evernote in 2023, the company has gone on to acquire the file-sharing service WeTransfer, the video platform Vimeo, and AOL, a first-generation U.S. internet service provider, in quick succession.

The rationale behind Bending Spoons’ series of acquisitions of internet companies experiencing slowed growth is the belief that these companies can maintain stable revenue based solely on their existing customer bases. The company explains that, since these are services already established in the market, it can secure a certain level of revenue while reducing the costs associated with acquiring new customers. Following each acquisition, the company focuses on lowering operating expenses through workforce reductions and organizational restructuring, while boosting profitability by adjusting subscription fees and marketing strategies.

Vending Spoons is rapidly expanding its scale through a series of acquisitions. Revenue for the second quarter of this year reached $704 million, a 126% increase year-over-year, while operating profit rose 139% to $240 million. However, a significant portion of the revenue growth stemmed from the performance of the newly acquired companies; the organic revenue growth rate of its existing business was limited to around 3%.

It is believed that Bending Spoons’ revenue structure played a role in Berkshire Hathaway’s decision to make an additional investment. Berkshire Hathaway has historically prioritized stable cash flow and long-term profitability as key investment criteria. In particular, observers note that Bending Spoons’ strategy of retaining acquired companies rather than selling them aligns with Berkshire Hathaway’s investment philosophy.

From Berkshire Hathaway’s perspective, market conditions are also becoming favorable for additional investments. As the valuations of software companies have recently declined, Bending Spoons now has greater room to expand its acquisition targets. It is explained that as companies—whose valuations had previously been driven by growth potential—are now being reevaluated by the market, the financial burden of acquisitions is also decreasing. A prime example is Airtable, a business software company that was valued at approximately $12 billion in 2021 but was sold to Bending Spoons this year for $2.3 billion—about one-sixth of its previous valuation.

While the capital markets expect Bending Spoons’ business expansion to accelerate as acquisition conditions improve, they view the ability to sustain the profitability of acquired companies over the long term as the key issue. While cost-cutting and price increases may boost short-term profitability, it remains to be seen whether the company can retain existing customers while maintaining the competitiveness of its services. In response, U.S. financial services firm StoneX stated, “Berkshire’s investment will strengthen Bending Spoons’ financial capacity and M&A capabilities,” but added that it is necessary to monitor the company’s operational performance following the acquisition.