Letterboxd Sale: As Corporate Buyers Circle, An Underdog Bidder Surfaces

Shockwaves rippled through film circles after news reports that Letterboxd soon could be snapped up by a corporate buyer. But the online community is both a highly valuable and quite perishable property, meaning a conventional plug-and-play M&A maneuver could trigger a significant backlash.

Netflix, Paramount, Sony Pictures, Versant and major private equity firms are among the participants in an auction run by boutique investment firm Liontree, according to Puck. Letterboxd, the report said, was estimated to be worth $250 million. That valuation is roughly five times greater than in 2023, when New Zealand-based co-founders Matthew Buchanan and Karl von Randow sold 60% of the 15-year-old start-up to Canadian holding company Tiny.

None of the interested parties ventured a comment when contacted by Deadline, though multiple people familiar with the proceedings said the roster of companies had taken part in early meetings.

While the three-paragraph Puck item was hastily aggregated by other media outlets, giving the inaccurate impression a deal was imminent, it also was based on a key assumption. Dealmakers, as is their wont, view Letterboxd as an operation destined to be plugged into a corporate structure, either as a film marketing apparatus or a data trove to power streaming. But that framing ignores a few factors, as was pointed out to Deadline by the leader of one suitor committed to safeguarding the company’s unique, cinephile-forward culture.

“This is not a commercial office building where everyone has 30-year leases and the buyer can just come in and move tenants around. This is an active, living, breathing community,” Elizabeth Joyce, head of social benefit corporation Intrinsic, said in an interview.

Intrinsic, whose bid was first detailed by Deadline two months ago, started out with a crowdfunding campaign on Seed & Spark. Ted Hope, a long-tenured indie film stalwart, linked arms with Joyce.

The grassroots effort, which set an initial goal of $100,000, mainly to build awareness and cover expenses, got a major boost last Thursday – coincidentally the same day that the Puck item appeared. It received legal clearance from its advisers to start welcoming independent investors via Wefunder, a more robust platform for generating investments. Due to changes to securities laws a decade ago, start-ups valued in the billions now routinely travel this route, with that funding capacity giving Instrinsic a chance to make a legitimate run at Letterboxd.

Joyce notes that she is leading a “mission-driven” operation and has not taken any funding from venture firms or other commercial interests. “Our intention is to put together a competitive offer,” she said. “We’re not expecting Tiny to do this out of the goodness of their heart.”

The uncertainty and uneasiness caused by consolidation in media and entertainment of late – with Paramount-Warner Bros. Discovery just the latest example – is part of Intrinsic’s pitch. Rather than “achieving efficiencies” (Wall Street parlance for cutting costs through layoffs), the group is focused on creating a sustainable financial structure for Letterboxd. In addition to advertising, the company sells premium subscription tiers.

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Joyce notes a statement that still appears on Tiny’s website about its approach to the Letterboxd investment. “Matt and Karl wanted a partner who understood what they’d built and wanted to help grow it without changing its character,” it says. “The team in Auckland continues to run the platform, ship features, and curate the community exactly as they did before the acquisition.”

M&A angst spilled onto social media Friday after the news got out about buyers taking a look at Letterboxd. When the company posted its customary entreaties for users to post the last four films they’ve watched, users by the hundreds issued pleas for the founders not to sell.

Letterboxd, though it has been successfully leveraged by numerous film campaigns and offers Fandango and Rotten Tomatoes parent Versant “a huge missing piece,” according to one person familiar with the company, is also known for its tastemaking cachet. A-list directors go there to share their inspirations, and users connect with each other as they once did in nationwide arthouses and video stores. The platform functions like an outsized Criterion closet, not merely a set of promotional tools.

Reports in recent months by Semafor, Puck and other outlets have failed to address “the question of who can credibly preserve the value of the asset,” Joyce maintained. “I didn’t see a single buyer who can do that.”

An investment firm run by Reddit co-founder Alex Ohanian is among those involved in early talks. Reddit, which went public two years ago after making a successful community-oriented pitch to Wall Street, would be one potential buyer to understand the hazards of mismanaging Letterboxd.

“The question would be, what is his intention?” Joyce wondered about Ohanian. “Is he looking to return high profits? This is actually more than an asset – it’s a cultural institution.”

The green light for accessing platforms like Wefunder also will enable Intrinsic to reach out directly to the Letterboxd community itself, Joyce notes. She declined to say whether she has been in contact with Liontree. She also said no potential buyer knows Tiny’s timetable for doing a deal, though the company says its investments come with “no pressure to flip the company in three to five years,” suggesting it won’t be in a mad dash to unload its stake.

“We’re playing the long game,” Joyce said. “This isn’t a stunt. This is a long, patient campaign that we intend to win.”