Photography by Steven Cook
As with any investment, your capital is at risk.
Part of the craft of private company investing, Peter Singlehurst suggests, is readiness to act on “lightbulb moments.”
He had one on top of one of Edinburgh’s famous hilltops a few years ago, while walking with an investment banker friend. She mentioned Bending Spoons, the high-growth acquirer and improver of consumer-facing software and platforms. Singlehurst wasn’t up to speed on this European tech champion. Milan, its home city, wasn’t known as a hotbed of billion-dollar tech startups.
“We were on Calton Hill swapping company stories,” he recalls. “She told me that this firm bought app businesses in need of revitalizing. It stripped out operating expenses and made them very, very profitable.”
At that time, Bending Spoons was preparing to acquire the popular note-taking app Evernote. It has since transformed it into a slick, bug-free profit engine.
“The lightbulb went on because what she said about Bending Spoons reminded me of Constellation Software, held by our public companies team and similarly successful in the business-to-business market. I asked her for an introduction.”
Meeting in Milan
Singlehurst flew to Italy in early 2023. Spending time with co-founder Luca Ferrari familiarized him with the vision of what Ferrari describes as a “25 percent private equity, 75 percent tech company.”
Three years later, Bending Spoons – named after the famous mind-over-matter scene in the film The Matrix – is one of the largest holdings of Baillie Gifford’s specialist private companies investment team. Other big holdings include:
- SpaceX
- Databricks
- TikTok parent ByteDance
Singlehurst has led the team from the firm’s Edinburgh headquarters since 2014. Location in the Scottish capital is, he says, an advantage. Being both connected to and separate from the noise of London’s financial markets, gives investment managers peace, perspective and lack of distraction vital to the discovery and study of global private company opportunities.
At the time it was introduced, Bending Spoons was already a magnet for European tech talent, rivalling Silicon Valley’s ability to attract the best people and fast-track their development. Ferrari, he learned, wanted the tech conglomerate to be “like Berkshire Hathaway, the defining investment company of the age.”
Its acquisitions weren’t then household names, but since that early encounter, as well as Evernote, companies joining the “Spooniverse” include:
- video platform Vimeo
- file-sharing service WeTransfer
- early internet icon AOL
They now share streamlined capabilities, including AI models, analytics, billing systems, customer support and marketing operations.
Luca Ferrari, chief executive and co-founder. © Bending Spoons
The “Spooniverse” playbook
The Bending Spoons treatment gives these established apps a new lease of life as slicker, more capable products, for which customers are happy to pay a bit more. The company then uses the free cash flow this generates to buy additional companies.
Its aim is not to sell the refurbished acquisitions, but to hold them indefinitely, while the benefits compound.
Experience shows that a Bending Spoons takeover tends to turn out well for these mostly US companies and their users. Success feeds into another key aspect of Ferrari’s vision: turning the company and its competitive-but-collaborative vibe into its own greatest product.
Bending Spoons works hard at being Europe’s top talent-attracting machine. Its workers rival Silicon Valley’s in terms of skill and ambition. Living costs are lower in Milan than in California, so the company can offer attractive packages that are still substantially lower than the Valley’s. Last year, the company had 800,000 applications for 200 jobs.
Forging trusting relationships
With private company investing, Singlehurst says, “the relationship comes first.” The understanding that he forged with Ferrari after that trip to Milan led to Singlehurst’s team’s initial $20 million investment to help with the acquisition of Evernote – “a fairly standard check for us.” The team has since followed up on that in successive funding rounds.
Meanwhile, the Italian firm’s valuation has risen from under $1 billion to approximately $11 billion at the end of last year.
“It creates value by being incredibly good at running these products and making them better at much lower cost,” Singlehurst adds. “This often means fewer people, though the ‘ruthlessness’ of that has been exaggerated. They’re guided by how to make the product the best it can be, using however many people it takes. Often, it’s ensuring a future for firms that might otherwise not have had one.
“It’s tempting to look back on what worked out well and say: ‘Oh, it was obvious.’ But when we invested, the risk was that a company that had done amazing things, taking over lots of little businesses, wouldn’t be able to pull off the same trick with big ones.”
“The astonishing thing,” Singlehurst continues, “has been the quality of its execution. It’s difficult to point to any missteps.” The resulting combination of people and process gives the firm an unassailable lead over would-be imitators.
Baillie Gifford made its first private company investment in 2012, in Chinese ecommerce firm Alibaba. Now its tally stands at more than 160. Singlehurst credits the firm’s success in the field to knowledge and relationship-building expertise accrued over 14 years.
Backing capital discipline
Baillie Gifford’s heritage and track record in public markets informs Singlehurst’s focus on return on equity. While early-stage VC investors pour capital into startups to fuel growth, his team hunts for companies at the point where they can scale into highly profitable businesses, without needing constant additional funding. Too much venture capital, he believes, creates “startup foie gras” – immature firms force-fed with cash that become bloated and inefficient.
Bending Spoons is a good example, he says, of a startup that got it right. Launched with just €40,000 in capital, it has always needed to be cash-positive, pulling itself to profitability by its own bootstraps before taking outside capital. That aligns with Baillie Gifford’s preference for strong returns on relatively modest investments. But finding, analyzing and cultivating such companies is where that “craft” comes in.
“In public markets, you have the same access and the same information as every other investor,” Singlehurst says. “Your only advantage is your insight.
“In private markets, you can still have better insight than competitors, but access and information can each provide that extra edge. It doesn’t guarantee you’re always going to do a good job, but it means more ways to differentiate yourself.”
In practice, getting access and information is an intensive and complex business. Since the likes of Bending Spoons don’t publicly disclose key details about themselves, investment managers must speak to more people, including other shareholders, board members and industry experts.
“You need to triangulate what you’re being told. Meetings and phone conversations can be the only way to get information, which is why the 10-strong private companies team met more than 900 companies last year. It’s a different way of working.”
“Once we’ve created a portfolio, we aim to be exceptional owners of those businesses. When it’s the right time to move on, we move on.” Singlehurst sees that time as far in the future for Bending Spoons, which last year completed or announced $3.9 billion in new acquisitions.
More broadly, as the rate at which new private company products and business models are developed speeds up, the Baillie Gifford team aims to find more companies turning their own lightbulb moments into enduring growth. Experience equips the Team to support them on the long climb ahead.
Mountain man
Peter Singlehurst has been at the heart of Baillie Gifford’s drive to provide clients with private market opportunities since 2014. It was then that investment managers on the firm’s Long Term Global Growth Team became frustrated at all the growth going on outside public markets. With their hands full managing tens of billions of dollars’ worth of client assets, he volunteered to explore this emerging sector.
A keen hiker and serial conqueror of Scotland’s “Munros” (mountains higher than 3,000 feet), Singlehurst finds Scotland’s wide-open spaces give him time and space to process investment ideas. The landscape provides welcome respite from his global travels to meet private company founders and examine their businesses at close quarters.
Risk factors
The views expressed should not be considered as advice or a recommendation to buy, sell or hold a particular investment. They reflect opinion and should not be taken as statements of fact nor should any reliance be placed on them when making investment decisions.
This communication was produced and approved in April 2026 and has not been updated subsequently. It represents views held at the time of writing and may not reflect current thinking.
Potential for profit and loss
All investment strategies have the potential for profit and loss, your or your clients’ capital may be at risk. Past performance is not a guide to future returns.
This communication contains information on investments which does not constitute independent research. Accordingly, it is not subject to the protections afforded to independent research and Baillie Gifford and its staff may have dealt in the investments concerned.
All information is sourced from Baillie Gifford & Co and is current unless otherwise stated.
The images used in this communication are for illustrative purposes only.
Important Information
Baillie Gifford Overseas Limited provides investment management and advisory services to non-UK Professional/Institutional clients only. Baillie Gifford Overseas Limited is wholly owned by Baillie Gifford & Co. Baillie Gifford & Co and Baillie Gifford Overseas Limited are authorised and regulated by the FCA in the UK.
Persons resident or domiciled outside the UK should consult with their professional advisers as to whether they require any governmental or other consents in order to enable them to invest, and with their tax advisers for advice relevant to their own particular circumstances. Baillie Gifford Overseas Limited is registered with the SEC in the United States of America.
Baillie Gifford International LLC is wholly owned by Baillie Gifford Overseas Limited; it was formed in Delaware in 2005 and is registered with the SEC. It is the legal entity through which Baillie Gifford Overseas Limited provides client service and marketing functions in North America. Baillie Gifford Overseas Limited is registered with the SEC in the United States of America.
191312 10061839
