Venture capital firm Sequoia Capital recently chose an unlikely candidate for funding — Mubi, a streaming service dedicated to independent cinema. Mubi closed on a $100 million from Sequoia, valuing the streaming platform at $1 billion and giving it unicorn status.
This has come as a surprise since media-related startup funding has been rather slow of late, compared to a few years ago. The investment is Sequoia’s first in a European streaming company, and the most significant investment in the entertainment sector in recent years for the VC firm which is best known for backing tech giants like Google, Apple, and YouTube.
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Mubi, originally named “The Auteurs,” was founded in 2007 by Efe Cakarel, a Turkish-born former investment banker and film fanatic. Cakarel came up with the idea for the streaming platform during a vacation in Tokyo when he discovered he was unable to find a copy of Wong Kar Wai’s “In the Mood for Love” anywhere online.
“I hadn’t been to a film school,” Cakarel said in an interview. “I’d never been to a film festival. I knew nobody. I just had this idea of creating a cinephile’s dream.”
“All my savings went into it,” Cakarel added. “We built our own content delivery network, our own encoding tool chains and our own streaming services. But we estimate that it costs us 70% less for our infrastructure than those who rely on other platforms.” While Cakeral had never been to film school, he had experience with technology, having graduated from MIT with an engineering degree before enrolling in Stanford’s MBA program.
Mubi pitches itself as “a place to discover ambitious films by visionary filmmakers.” It sells a monthly subscription to an international cross section of works, including many film festival award winners.
This year, Mubi scored its first Oscar nominations with breakout hit “The Substance” and Danish drama “The Girl with the Needle.” Coralie Fargeat’s body horror movie “The Substance” went on to rake in a company record of $84 million at the global box office.
Significant recent deals include North American rights for “The History of Sound,” multiple markets on Cannes movies “Sentimental Value” and “My Father’s Shadow,” worldwide rights to Paolo Sorrentino’s next film “La Grazia,” about the final days of a fictional Italian presidency, and multiple markets on Joe Wright’s “Mussolini: Son of the Century.” Previous high-profile multi-territory buys include “Queer,” “Perfect Days,” “Fallen Leaves,” “Decision to Leave,” “Aftersun,” “The Worst Person in the World” and “Priscilla.”
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This acquisition has been seen as an exciting development for indie cinema with some seeing it as a victory of curation, passion, and auteur cinema over algorithm-driven franchise IP. While the traditional film industry has been facing a number of different challenges lately with the box office struggling post-pandemic, and streaming platforms calibrating content spending, there is also a rising demand for quality indie films.
This year, seven of the Best Picture Oscar nominees were independent films including “Anora,” “The Brutalist,” and “The Substance,” which was acquired and released by Mubi, grossing $84 million globally. Mubi’s hybrid model, releasing films in cinemas and online, has helped it capture box office revenue and streaming subscriptions.