New York Times talks to buy Letterboxd, Digi Mart USA News (Auckland, New Zealand): The New York Times Company is now in exclusive, advanced talks to buy Letterboxd, the social film review and viewing history-sharing platform founded by Aucklanders Matthew Buchanan and Karl von Randow. According to a report in the New York Times, the deal values the company at roughly US$330 million (NZ$585 million).
In September, the Times said it was one of three companies negotiating with Letterboxd, along with Sony Pictures and A24, the fast-growing film-maker and distributor behind Nathan Fielder’s You Can See Everything and other independent hits. The paper says other contenders were squeezed out as the price rose.
The valuation was initially reported as US$250 million earlier this year, when Netflix was circling, and then US$300 million in September.
The Times says Letterboxd has 30 million highly engaged film fans, some on free plans and some on paid premium subscriptions, and earnings of around US$15 million. The paper says the deal could still fall apart, but its report includes details suggesting the talks are moving toward final terms.
A Letterboxd deal would extend the New York Times Company’s strategy of growing its newspaper’s paid subscriptions through acquisitions, including its 2016 purchase of consumer guide Wirecutter and its 2022 deals to buy sports site The Athletic for US$550 million and Wordle for an undisclosed sum.
Buchanan and von Randow hold 40% of Letterboxd today, with 20% each, according to Companies Office records. At the valuation quoted by the Times, that stake would be worth about NZ$206 million between them, or US$132 million (NZ$234 million) for the 40% holding.
In July, when sale rumours first surfaced, a spokeswoman for the pair told the Herald: “As Letterboxd has grown, it’s natural there will be interest in what we do next. There’s nothing specific for us to share at this time.
Any decision about Letterboxd’s future would involve the founders.”
Buchanan and von Randow earlier received around US$15 million (NZ$26.5 million) each in a 2023 deal in which Canadian entrepreneur Andrew Wilkinson took a 60% stake in Letterboxd through his holding company, Tiny. Wilkinson had been a long-time friend of Buchanan since the pair met on the blogging platform Tumblr in the 2000s, the co-founder told the Herald.
Letterboxd has 40 employees in New Zealand, the United States, Canada and the United Kingdom, according to the founders’ representative. The site, founded in 2011, grew rapidly during Covid lockdowns and through viral videos in which a range of Hollywood celebrities revealed their favourite films for its “Four Favorites” series.
Long-time editor-in-chief Gemma Gracewood left Letterboxd in March last year after nearly a decade to found her own production company. She is also interim CEO of the NZ Comedy Trust.
Letterboxd is the third commercial success for Buchanan and von Randow. The pair founded Cactuslab in 2001 as their first venture.
Both graduated from the University of Auckland in the mid-1990s with computer science degrees; von Randow joined web design firm WebMedia as his first job, while Buchanan became art director of computer magazine Bits & Bytes and later NetGuide. Cactuslab became a pioneer in its field and counted Barfoot & Thompson, Ockham Residential, Honda New Zealand, the Jane Goodall Institute, the AA and Westpac among its clients.
Both founders remain directors.
Buchanan said earlier: “We didn’t realise at the time but, by starting and growing Cactuslab, we were building the engine that would eventually allow us to build Letterboxd.” He added: “If you don’t take funding at the start of a big tech project, one of the few other viable options is to supplement it with other paid work. It’s a much slower path, but it allowed us to be much more deliberate in how we designed the features and grew a resilient community.”
In 2012, Buchanan and von Randow founded their second start-up, Verifi Identity Services, with fintech players Tyler McNamee and Vincent McCartney, each holding a 25% share. The company created Cloudcheck, an identity verification platform, and gained Sharesies, Milford Asset Management and other high-profile firms as early adopters.
In 2022, UK-listed GBG Group bought Verifi for NZ$20 million upfront, plus NZ$8 million in earnouts.
