Luca Ferrari is the co-founder and CEO of Bending Spoons—a technology company that specializes in AI and digital products. Between debt and secondary sales, Bending Spoons has raised $500 million.
On the Dealmakers show, Ferrari talks about folding his first company and rolling the money into a new venture. He discusses both bootstrapping and raising funding, and the difference between primary and secondary equity. Plus, what you get when Google has a baby with Amazon and Berkshire Hathaway.
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Luca Ferrari was born in a small Italian town with a population of just 900 people.
It was a simple upbringing, in a loving family, surrounded by farms. Still, from an early age, Luca says that he had big dreams and a strong urge to build something.
So, when it came time for university, he considered all options: from medicine to physics to literature. Although he describes himself as not technical, but rather an abstract thinker who loves to mull different concepts and map out models on paper, he ended up choosing to study engineering. He saw this as a challenge, as well as a practical way to make a difference in the world.
Landing in Denmark for college opened up a whole new world for Luca. It provided that exposure to great achievements and scale of ambition that was missing from his peaceful, small town childhood.
This was the catalyst for discovering entrepreneurship, and it triggered him to become an entrepreneur.
Luca found himself in an international environment, surrounded by new technology and insights. Almost right away, it provided him a eureka moment: entrepreneurship was what he had always been looking for, and would be his life’s vocation.
It brought together everything Luca had dreamed of from childhood, to what he would do in the future.
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The sequence of events keep evolving and aligning to make his aspirations of entrepreneurship a reality.
Luca entered a double-degree program, for which he and a compatriot were selected from over 100 applicants. Relocating to Denmark as part of the program, they became fast friends.
As fate would have it, Luca found himself sick with pneumonia, while his friend (and, by then, roommate) went off downtown for a night out. There, he met the person who would become their third cofounder. Together, they formed the idea for their first company: a self-writing diary for users’ lives—a challenging technical problem.
Luca and his first cofounder were about to graduate with a Master’s in Science, while the third cofounder was working on his Ph.D. In short, they had no money. So, they decided that one of them would get a job, and they would all split that salary to pay the rent and living expenses, while the others could work full-time on their startup idea.
Luca ended up getting the best job offer of the three—a strategic consultant position with McKinsey. He was upfront with his prospective boss that, as soon as his startup got funded, he planned to quit.
The other two co-founders got busy working on their prototype around the clock, while Luca would pitch in on nights and weekends. A year later, they raised half a million euros in funding, and he resigned from McKinsey. Today, he jokes that he did that just in time to significantly speed up the venture’s ultimate failure.
Though they were green, they had a good ride. None of the three had ever written a business plan or pitched investors before. At the time, capital was far more limited for startups—especially in Europe.
A couple of years later, they were forced to shut down. They had been betting on a tax refund from the Danish government, and when it got delayed, they were out of options.
No investor wanted to go through the extra expense and hassle of liquidating the company. So, with 40k euros still in the bank, the three co-founders plus their top two team members decided to throw everything at a second entrepreneurial attempt.
Today, Luca says that being in the middle of failing is far more painful than having failed. They actually found a great sense of relief in officially closing down that first venture. Even today, with Bending Spoons, the challenges don’t stop. Only they have managed to pull off more incremental wins over time than failures: which Luca credits getting through thanks to having a good support network.
Luca Ferrari and his fellow co-founders’ latest venture is Bending Spoons: an AI and technology company that creates and scales digital products.
The apps in the Bending Spoons portfolio now have 100M monthly users, with some of the best ranked apps in the marketplace. These include Splice, Remini, and Dawn AI.
Bending Spoons was primarily bootstrapped by reinvesting profits after seeding the company with the initial 40k euros. However, now they have also had secondary equity transactions, and have leveraged debt financing to the tune of almost half a billion dollars to date.
Storytelling is everything which is something that Luca Ferrari was able to master. Being able to capture the essence of what you are doing in 15 to 20 slides is the key. For a winning deck, take a look at the pitch deck template created by Silicon Valley legend, Peter Thiel (see it here) where the most critical slides are highlighted.
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Listen in to the full podcast episode to find out more, including:
- Three ways to fund your growth
- The benefits of cofounders for getting through the failures
- Luca Ferrari’s top advice when launching a business