Bending Spoons indicators $1.38 billion deal for struggling YouTube rival Vimeo

Italian cellular app developer Bending Spoons SpA right this moment introduced its intention to accumulate YouTube rival Vimeo.com Inc. in an all-cash deal valued at about $1.38 billion.

Bending Spoons stated it expects the deal to shut by the fourth quarter of this yr, topic to regulatory approvals. At the moment, publicly traded Vimeo can be delisted.

Based in 2004, Vimeo is a US video internet hosting and sharing platform that’s considerably much like YouTube, however is distinguished by its creator focus. Content material creators can use a wide range of instruments, together with some synthetic intelligence options, to supply and share good movies. It has develop into in style for its excessive definition playback choices and lack of adverts at a time when YouTube is greater than ever.

The corporate spun out of InterActive Corp. in 2021 to develop into an unbiased and publicly traded entity, however since then it has struggled for development and misplaced almost 90% of its market worth. Consequently, Vimeo’s government administration introduced final yr that it was contemplating the corporate’s strategic choices.

Bending Spoons, which owns in style apps together with Evernote Corp., MeetUp Inc. and WeTransfer BV, was first talked about as a possible Vimeo purchaser in 2024 within the wake of the announcement.

Bending Spoons co-founder and chief government Luca Ferrari stated it plans to make “formidable investments” within the US and Vimeo’s different precedence markets as soon as the acquisition closes. He stated these investments will span all core areas of his enterprise, together with creator-focused and enterprise choices, in addition to AI-enabled “accountable” options.

Nonetheless, the long run is probably not so vibrant for some Vimeo workers. The Italian firm has developed a sample of buying smaller, struggling corporations, then embarking on cost-cutting, layoffs and chopping what it sees as pointless options and companies.

For instance, when it acquired the note-taking app Evernote in 2022, it shortly after made the choice to put off most of its workers within the US and Chile and transfer its operations to Milan. It adopted by shutting down the Linux-based variations of Evernote and limiting the options accessible to free customers. Equally, when Bending Spoons purchased WeTransfer final yr, it instantly laid off 75% of that firm’s workforce earlier than limiting free customers to only 10 file transfers monthly.

Vimeo presently makes cash by means of a subscription-based mannequin the place content material creators and companies pays to entry premium video creation instruments, together with its extra refined AI choices. It additionally gives monetization choices for content material creators who can create their very own subscriptions for unique movies.

Bending Spoons hasn’t outlined any particular plans but, however given its previous historical past, it might put extra video creation instruments behind a paywall, and the layoffs would not be a shock both, stated Constellation Analysis Inc. analyst Holger Müller.

“That is the start of a brand new chapter in Vimeo’s historical past, however do not anticipate a cheerful ending,” the analyst stated. “Bending Spoon’s apply of chopping prices in any respect prices will virtually actually apply right here as the corporate fights alone. Given its Italian roots, Bending Spoon could also be making an attempt to place Vimeo as a extra European-oriented video web site, slightly than making an attempt to compete with YouTube.”

Vimeo CEO Philip Moyer stated in an announcement that Bending Spoons goals to develop the corporate’s product choices throughout all key segments, together with its self-service enterprise, Vimeo Streaming and Vimeo Enterprise.

Picture: Vimeo