Why ‘Hold Forever’ Investors Are Snapping Up Venture Capital ‘Zombies’

Italian tech company Bending Spoons recently made headlines with the acquisition of AOL and a $270 million funding round, quadrupling its valuation to $11 billion in just 48 hours. The company has grown rapidly by acquiring dormant tech brands such as Evernote, Meetup, and Vimeo, then reviving them through cost-cutting and price adjustments. Unlike typical private equity firms, Bending Spoons has no plans to sell these businesses, embracing a “hold forever” strategy.

Andrew Dumont, founder and CEO of Curious, a firm that also targets what he calls “venture zombies,” predicts this approach will become more popular as AI-native startups render older VC-backed software less relevant.

“Our belief is that the venture power law, in which 80% of companies fail, produces many great businesses even if they aren’t unicorns,” Dumont told TechCrunch.

Dumont defines a “great business” as one that can be acquired at a low price and quickly turned profitable, generating substantial cash flow. This buy, fix, and hold model is used by firms like Constellation Software, as well as newer investors such as Bending Spoons, Tiny, and SaaS: group, Arising Ventures, and Calm Capital.

“In our model, we buy companies, make them profitable, and use earnings to grow the business,” Dumont said.

In 2023, Curious raised $16 million to acquire stalled software companies unable to secure follow-on funding. Since then, it has purchased five businesses, including UserVoice, a 17-year-old startup that previously raised $9 million from VC firms like Betaworks and SV Angel.

Dumont explained that “stagnant companies sell for a fraction of the valuation commanded by healthy SaaS startups,” sometimes as low as 1x annual revenue, compared with the typical 4x multiple for active companies. By applying cost-cutting and price adjustments, Curious can achieve 20%–30% profit margins almost immediately. Centralising functions such as sales, marketing, finance, and administration across its portfolio enables Curious to turn companies profitable without the pressure of a VC-scale exit. “We don’t need to sell, so we can balance growth and profitability sustainably,” Dumont said.

According to Dumont, traditional VCs don’t emphasise profitability because investors focus on growth, which drives potential VC-scale exits. Curious reinvests cash generated from its companies to acquire additional startups.

The firm plans to buy 50–75 startups like UserVoice over the next five years, targeting companies with $1 million to $5 million in annual recurring revenue, a market segment often overlooked by private equity and secondary investors.

Dumont estimates that in nearly two years, Curious has evaluated 500 companies and acquired five. While Bending Spoons’ recent valuation surge may validate the venture zombie acquisition model, Dumont notes that replicating such profitable turnarounds is challenging. “It’s a ton of work,” he said.