The Nightman Cometh for Late Stage SaaS: Airtable Acquired by Bending Spoons

In this scenario there's a big difference between Enterprise Value and Equity Value

Enterprise Value is the value of the standalone business, meaning it's tech, team, and customers

That's what Bending Spoons is buying for $1.285B

And companies are bought on a cashless, debtless basis

Which means Bending Spoons does not get the net cash and cash equivalents on the balance sheet, which clocks in at $965M at time of acquisition

The remaining cash gets distributed to equity shareholders, increasing the share price above and beyond the Enterprise Value

That means the numerator for equity holders is around $2.25B, which changes the multiple math and return profile from their end.

When you raise money you are selling 10%, maybe 20% of the company

The investors at that point in time are coming at it from the perspective of "what can go right"

On the other hand, when you go to sell a company you are selling… well, the whole thing

That takes an entirely different approach to risk, opportunity, and upside

The acquirers are thinking about what can go right, but mostly thinking about "what could go wrong"

That calls for a much more contemplated price

They didn't need to sell to stay alive

The company reached profitability in late 2024 after a series of restructurings

In many ways it feels like punting on third down when you sell with so much cash on the balance sheet

It's a sign they didn't have any bullets left in the chamber to reaccelerate growth and thought the valuation would only go down from here

Right before the deal went down they carved out an AI unit

So the legacy business is sold off and they keep the new, relatively unproven AI assets to try to do something cool with them

So does that mean the founders and investors thought the legacy business was going to eventually go to zero?

Is this a good acquisition by Bending Spoons?

IDK, but more importantly, it's an acquisition, and they need to keep doing acquisitions to keep the wheels turning

Their entire business model is predicated on doing acquisitions

Despite the fact that the majority of M&A transactions actually destroy value

Assuming all investors had a 1x liquidation multiple, they at least get their investment back

And they get paid FIRST

Paul at 20vc did some back of the envelope math and thinks it will be a round trip exercise (sans the interest) for investors from the C, D, E, and F rounds

To say that again - no one after March 2018 "made" money

Which includes employees… if you are an employee who joined post Series C, the only money you made above and beyond your salary is from secondary sales

How many VCs raised money off their paper markups on Airtable?

In fact, given it's been nearly a decade, some VCs may have raised TWO funds off the floor Airtable's multiple of money valuation presented

As far as tech workers go, post Series C used to be a great time to join - proven product market fit, investor credibility, cash in the bank and a decent salary with equity upside

That mid ground (not too risky, but also still some meat on the bone) feels dead as a doornail

For investors and employees, cometh early, or cometh post IPO

On the bright side, moves like this unlock a bunch of "dormant" talent stuck at late stage SaaS companies with no credible path of going public

Everyday the founders and employees kept chipping away at Airtable, a clear candidate to be gut punched by AI, was another day they were not working on AI to gut punch someone else

Sometimes we need parts of the rainforest to burn down to make space for light to shine through the canopy and nourish new businesses and ideas

Anyone who wants to dunk on this outcome has no idea how hard it is to build anything worth over a BILLION dollars

While this is below their expected outcome given their prior funding rounds, they still created more than a billion dollars in value for equity holders (the math is up in lesson one)

This is not how the writers (investors, founders, and employees) intended for the story to end

This is not how "they drew it up"

And the ending is juxtaposed to the fact that the company has a ton of customer love, 500,000 organizations using the product, was still growing double digits, and close to half a billion in revenue.

These are all amazing characteristics if you strip out the funding dynamics

And yet… despite a shitty plot, this is not the only version of this show we're going to get

Anyone who received Series C or D or E funding in 2019 / 2020 timeframe is a candidate for a Nightman Cometh sequel

Investors are tired of waiting for a return.

Many would rather just get swallow their 1x liq pref and move on.

The dam has broken, and they can save face if there's a wave of others accepting a similar faith (a broad industry based mea culpa of sorts)

The same goes for employees who are even more tired.

Imagine sticking it out through two, three, even four rounds of layoffs? Working on something for six, seven, eight years on something with negative compounding equity value?

It's time to get the show on the road