Why ‘hold forever’ investors are snapping up venture capital ‘zombies’

Italian company Bending Spoons flew largely under the radar — until last month. In a span of 48 hours, the company announced theacquisition of AOLand a massive $270 million raise, quadrupling its valuation to$11 billion, up from $2.55 billion set in early 2024. Bending Spoons has grown rapidly by acquiring stagnating tech brands like Evernote, Meetup, and Vimeo, then turning them profitable through aggressive cost-cutting and price increases. While the company’s approach is similar to private equity, there is one key difference: Bending Spoons has no plans to sell these businesses. Andrew Dumont,the founder and CEO ofCurious, a firm that also acquires and revitalizes what he calls “venture zombies,” is convinced this “hold forever” strategy will become increasingly prominent in the coming years as AI-native startups make older VC-backed software businesses less relevant. “Our belief is that the venture power law, in which 80% of companies ‘fail,’ produces many great businesses, even if they’re not unicorns,” Dumont told TechCrunch. Dumont defines a “great business” as one that can be purchased at a low price and quickly revived to generate substantial cash flows. This “buy, fix, and hold” strategy is the playbook for a growing number of investors, from the 30-year-old Constellation Software, which pioneered the model, to newer players, including Bending Spoons,Tiny,SaaS.group,Arising Ventures, andCalm Capital, according to Dumont. “Our whole model is to buy these companies, make them profitable, and use those earnings to grow the business,” Dumont said. In 2023, Curious raised $16 million in dedicated capital for buying software companies that have stalled and can no longer secure follow-on investment. Since then, the firm has bought five businesses, including UserVoice, a 17-year-old startup that raised$9 millionin VC funding from Betaworks and SV Angel. “It’s a great business, but the cap table wasn’t aligned with keeping it. These funds get old, and these companies just sit there,” Dumont said. “We provide liquidity and also reset these companies for profitability.” Although Dumont didn’t disclose how much he paid for UserVoice, he said that stagnant companies sell for a fraction of the valuation commanded by healthy SaaS startups, which typically sell for 4x annual revenue or more. Based on our conversation, we estimate that “venture zombies” sometimes sell for as low as 1x yearly revenue. By implementing cost-cutting and price increases, Curious can push these businesses to achieve 20% to 30% profit margins almost immediately. “If you have a million-dollar business, you’re kicking off $300,000 in earnings,” he offered as an example. They achieve the turnarounds because, unlike the stand-alone companies, they can centralize functions like sales, marketing, finance, and other admin roles, across all of their portfolio companies. “We’re not trying to sell the businesses we acquire and don’t need VC-scale exits, so we can balance growth and profitability more sustainably,” Dumont said. When asked why VCs don’t urge their startups to be profitable like Curious does, Dumont responded by saying: “Investors don’t care about earnings; they only care about growth. Without it, there’s no VC-scale exit, so there’s no incentive to operate with that level of profitability.” The cash generated from Curious’ companies is then used to buy other startups, Dumont said. The firm plans to buy 50 to 75 startups like UserVoice over the next five years, and Dumont is certain he won’t have a shortage of targets to choose from. Curious is focused on acquiring startups that generate $1 million to $5 million in recurring revenue annually, a segment of the software market that, according to Dumont, private equity shops and secondary investors have historically ignored. “We’ve been doing this for a little under two years now, and we’ve probably looked at at least 500 companies, and we bought five,” Dumont said. While Bending Spoons’ big valuation hike may validate the “venture zombie” acquisition model, Dumont doesn’t expect a lot of new competition. Turning profits out of stagnation isn’t easy. “It’s a ton of work,” he said. Topics Reporter, Venture Marina Temkin is a venture capital and startups reporter at TechCrunch. Prior to joining TechCrunch, she wrote about VC for PitchBook and Venture Capital Journal. Earlier in her career, Marina was a financial analyst and earned a CFA charterholder designation. You can contact or verify outreach from Marina by [email protected] via encrypted message at +1 347-683-3909 on Signal. StrictlyVC concludes its 2025 series with an exclusive event featuring insights from leading VCs and builders such as Pat Gelsinger, Mina Fahmi, and more. Plus, opportunities to forge meaningful connections. Anduril’s autonomous weapons stumble in tests and combat, WSJ reports This Thanksgiving’s real drama may be Michael Burry versus Nvidia The future will be explained to you in Palo Alto Why ‘hold forever’ investors are snapping up venture capital ‘zombies’ Altman describes OpenAI’s forthcoming AI device as more peaceful and calm than the iPhone OpenAI learned the hard way that Cameo trademarked the word ‘cameo’ US banks scramble to assess data theft after hackers breach financial tech firm