Bending Spoons just bought his company for $100,000,000+ with Issuu CEO Joe Hyrkin
Oct 24, 2024
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Joe Hyrkin, former CEO of Issuu and a pioneer in digital publishing, discusses his journey from launching the platform in 2006 to achieving $50 million in revenue. He shares insights on Bending Spoons' strategic acquisition for over $100 million and the motivations behind the decision. Joe explains the complexities of navigating market conditions, the challenges of predatory lending, and the nuances of startup financing. With firsthand experiences, he sheds light on the M&A process and offers valuable advice for entrepreneurs considering exit strategies.
Joe Hyrkin's strategic use of debt financing significantly fueled Issuu's growth while avoiding equity dilution during fundraising efforts.
The acquisition process highlighted the necessity of choosing reliable partners, as consistent communication and respect for agreements were crucial to closing the deal with Bending Spoons.
Deep dives
The Journey to Acquisition
Joe, the former CEO of Issue, recently discussed his company’s acquisition journey, highlighting the transition from being a Danish company to being acquired by the Italian firm Bending Spoons for a substantial nine-figure sum. Throughout his 11 and a half years as CEO, Issue evolved from a slow revenue growth model to a profitable enterprise with over $30 million in revenue. Joe stressed the significance of timing and market position when deciding to sell, revealing that the deal could have yielded a higher return had they sold earlier. This acquisition marks a successful exit, showcasing the value of resilience in navigating the competitive SaaS landscape.
Strategic Use of Debt
Joe elaborated on his decision to employ debt financing as a strategic maneuver to fuel growth without diluting ownership through traditional fundraising. He described a pivotal $20 million debt deal that enabled him to invest in the company’s innovation and expand its offerings without adding preference stacks that would complicate future fundraising rounds. However, he also candidly shared the challenges faced with his first lender, who imposed aggressive terms after they missed revenue covenants, leading to stressful negotiations. Ultimately, by refinancing with a reputable lender, Joe managed to alleviate these burdens and continue growing the business effectively.
Navigating the Acquisition Process
In discussing the M&A process, Joe emphasized the importance of selecting the right legal and financial partners to facilitate smooth transactions. He highlighted his experience with Bending Spoons, which honored the agreed terms without renegotiation, in contrast to other potential suitors that may have drawn out discussions. Joe pointed out that while many companies appear attractive for acquisition, the actual interest diminishes once negotiations begin, often narrowing down to one or three serious contenders. This insight underscores the unpredictable nature of acquisition offers and the necessity for flexibility and selective engagement in the M&A landscape.
Joe launched Issuu back in 2006 to help magazines move digital. He grew to $50m in revenue and raised about $50m. In March 2024 he decided to exit in a nine figure deal. How'd the deal go down? Why did he go with Bending Spoons?
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