June 23, 2024

Matt Buchanan and Karl von Randow, the two movie mega-fans who started Letterboxd as a part-time labor of love, have sold a majority stake in the business.

So what’s going to be different now? Not much, the two New Zealanders tell Variety. For starters, they remain in charge of running Letterboxd. “We are not expecting a whole lot to change!” says von Randow. “We are not suddenly going to have four new bosses.”

The Letterboxd founders chose to sell a controlling stake to Canadian investment firm Tiny — a deal that pegs the company’s value at north of $50 million — because of its relatively laissez-faire philosophy. “Instead of us feeling like we’ve been slurped into something massive,” von Randow says, “their approach is to get involved when founders need help.”

One of Letterboxd’s next big initiatives will be expanding to add TV shows for users to rate, review and track. But that’s not new, nor will it necessarily be accelerated because of the Tiny investment, according to Buchanan. TV “has been on the cards for several years,” he says. “We have been prototyping that.”

There’s concern among some Letterboxd fans that expanding to TV could be problematic, Buchanan notes: “The main pushback around the idea of adding TV is that our community is perhaps scared that the film-logging may be overrun by people binge-watching ‘Friends.’” He’s not ready to share exactly how Letterboxd will introduce television to the platform, but the priority is to “introduce it without disrupting the experience of people already using it.” Buchanan also points out that the makeup of TV series is structurally is different from movies, in that TV has multiples seasons and episodes, and “our members want to react on every level — show, season and episode.”

Buchanan and von Randow launched Letterboxd in 2011, and they worked on it part-time as a side project to their web design studio. It wasn’t until COVID-19 hit that usage exploded — and a little over three years later, the service now has more than 10 million registered accounts. The founders hired their first full-time employee in March 2020, and the company’s headcount is nearing 20 (not counting multiple freelancers and part-timers).

“It was starting to get to the upper end of our experience” in terms of managing a company, says Buchanan. “Karl and I were starting to think we need some help… We need some mentorship to take us to the next level.” The pair evaluated the offer from Tiny co-founder Andrew Wilkinson earlier this year and concluded that “it’s a partnership we could benefit from.”

As far back as 2013, Letterboxd has received buyout offers from various companies, Buchanan says. But none of those went particularly far: “Companies want to come in and give you a lowball offer. It never felt like the right partner.”

Buchanan also says it was important “to stay independent from the industry,” and that ruled out considering offers from certain interested buyers. “Letterboxd occupies this really interesting niche between studios, filmmakers and community, bringing people together in a unique way,” he says.

About half of Letterboxd’s employees are based in New Zealand, including department heads and the engineering team, while the other half are dotted across the U.S., Canada and the U.K.

Wilkinson explains Tiny’s investment in Letterboxd — and its overall strategy — this way: “We just look for businesses that are doing something good in the world, with happy employees and happy customers.”

Wilkinson first met Buchanan more than a decade ago and began following him on Tumblr. He’s been tracking Letterboxd for the past several years. In March 2023, Wilkinson was in Auckland, New Zealand, for a conference and met up with Buchanan. “I asked him, ‘Have you ever though about selling?’ He was worried if the wrong people bought it, they would mess it up.” According to Wilkinson, he sent an offer within 24 hours.

Tiny’s portfolio of majority-owned companies include Dribble, Girlboss, MetaLab, Pixel Union, AeroPress and Stamped. All are cash-flow positive and profitable venture, according to Wilkinson. But unlike some investment firms or roll-up plays, Tiny doesn’t try to dictate that companies it invests in form partnerships. “If you force two companies two work together, that’s a good way to generate resentment,” he says.

“We’re pretty unconventional,” says Wilkinson. “A [private equity] firm would say, ‘We’re putting someone in your office.’ But we don’t do that.” Tiny holds board meetings with its companies once a year and otherwise asks them to send monthly financial reports.

Not incidentally, Wilkinson says he’s a big movie fan. “My happy place is sitting in a dark theater,” he says. “I’m a dad. I’m busy. My escape is going to the movies.”

Pictured above: Matthew Buchanan (left) and Karl von Randow

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