The paper says the deal could still fall apart, but its report also includes details that indicate things are getting down to brass tacks, including:
- Buchanan and von Randow would stay in charge.
- The Times’ advertising systems would be integrated into the (currently ad-free) site.
- Letterboxd would run as a standalone site for the foreseeable future.
A Letterboxd deal would extend the New York Times Company’s strategy of bolstering its newspaper’s paid subscriptions via acquisitions, including its 2016 purchase of consumer guide Wirecutter, and its 2022 deals to buy sports site The Athletic for US$550m and Wordle for an undisclosed sum.
Founders’ 40% stake
Buchanan and Karl von Randow hold 40% of Letterboxd today (20% each), according to Companies Office records, implying a possible payday of NZ$206m between them at the valuation quoted by the Times.
A US$330m sale to The New York Times Company would value that 40% stake at US$132m ($234m).
“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,” a spokeswoman for the pair told the Herald in July, when sale rumours first surfaced.
Buchanan and von Randow earlier made around US$15m ($26.5m) each in a 2023 deal that saw Canadian entrepreneur Andrew Wilkinson take a 60% stake in Letterboxd via his holding company, Tiny.
Wilkinson was a long-time friend of Buchanan after the pair met on the blogging platform Tumblr in the 2000s, the Letterboxd co-founder told the Herald.
Letterboxd has 40 employees in New Zealand, the United States, Canada and the United Kingdom, according to Buchanan and von Randow’s rep.
The site, founded in 2011, exploded in popularity amid Covid lockdowns and viral videos that saw a scrum of Hollywood celebrities revealing their favourite movies for Letterboxd’s “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.
Third big score
Letterboxd is Buchanan and Karl von Randow’s third commercial hit.
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 was a pioneer in its field and drew the likes of Barfoot & Thompson, Ockham Residential, Honda New Zealand, the Jane Goodall Institute, the AA and Westpac as clients. Buchanan and von Randow remain directors today.
“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,” Buchanan earlier told the Herald.
“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.”
Buchanan and von Randow founded their second start-up, Verifi Identity Services, in 2012 with fintech players Tyler McNamee and Vincent McCartney (each of the four had a 25% share).
They created Cloudcheck – an identity verification platform inspired by the user-hostile nature of the Crown-backed RealMe – and gained Sharesies, Milford Asset Management and other high-profile firms as early adopters.
In 2022, UK-listed GBG Group bought Verifi for $20m upfront, plus $8m in earnouts.
Chris Keall is an Auckland-based member of the Herald’s business team. He joined the Herald in 2018 and is the technology editor and a senior business writer. He has recently written about NZ’s 200 largest hi-tech exporters, Spark’s new chairman fielding shareholder barbs on his first day on the job and customers’ varying fortunes in a trio of local crypto failures.
