(2022-10-28) Ryan Reynolds Didnt Pay Close Enough Attention To The Matrix

The Impassioned Moderate: Ryan Reynolds didn’t pay close enough attention to The Matrix. News came out a few weeks ago that Bending Spoons, a consumer app studio, raised a massive $340 million round of financing. The press gushed about it: “Hollywood star, tech execs invest in Italian start-up Bending Spoons”, “Ryan Reynolds invests in 'terrifying' Italian start-up Bending”.

The problem? Bending Spoons is the one the most predatory actors on the entire App Store - they’re terrifying in a completely different way

Bending Spoons has built a nice business with €108M of revenue and €16M of operating income

the vast, vast majority of this funding (notice how the press release carefully says “financing” and not “funding”) is almost certainly in the form of debt. So what most likely happened is that Bending Spoons raised ~$50M in equity from all these various celebrities, and a much larger debt facility (~$300M) that they can draw on to pursue the “acquisitions” they refer to

let’s talk about Bending Spoons’ business model. The basic concept is very simple:

• Find a solid app that someone else built and buy it from them (see Splice (acquired from GoPro) and 30 Day Fitness)
• Optimize the monetization of said app

There is absolutely nothing wrong with this business model. In fact, it’s the model game companies have used for decades

What differentiates Bending Spoons, though, is how they do it.

Remini - Bending Spoons’ new app that the press is gushing over - is $10 a WEEK. And Splice, the app that started it all? That’ll set you back a cool $5/week.

the great thing about the App Store is that a consumer never has to put their credit card information in when making a purchase - just quickly scan your face and the payment is made. When you combine this seamless form of payment with auto-renewing subscriptions, you’ve created a beautiful (and sometimes terrifying) dynamic.