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Sequoia Capital hopes to capture an increase in global demand for arthouse cinemas after valuing the indie streaming service at $1 billion and leading a $100 million investment in Mbi, marking the rare foray into film and media by Silicon Valley venture capital firms.
Cash from Sequoia, best known for its early bets on high-growth technology companies such as Google, Apple and YouTube, helps Mubi build a global distribution network and invest in new films.
The funding shows a vote of confidence for the 18-year-old company, which has recently undergone a major shift from a niche indie streamer to a Hollywood player.
Andrew Reed, a partner at Sequoia, who led the investment, said the company is banking on undeveloped global demand for Highbrow films, including those bankrolled by Mubi.
“We are Silicon Valley investors, so the problem is that projects like this all over the world will resonate. Our opinion is that this resonates with far more people than anyone else.”
The Sequoia Contract gives the financial firepower of London-based Mbi. This is when the broader film industry (the dangerous business at its best) is upset by the disruptive effects of the streaming revolution. It also follows a series of big swings by Mbi. This month they beat Apple and Netflix to win the right to Lynn Ramsay’s death.
Mbi’s streaming service, alongside the US Indies, features a wide range of international films from Latin America, Europe and Asia. It has around 20 million registered users worldwide, with US subscribers paying $14.99 a month, but it also distributes independent films in cinemas in the UK, US, Canada, Latin America and Germany. Currently, we have offices in 15 countries with over 400 employees.
“Mbi is growing, profitable and an incredibly rare combination in the film business,” Reed said.
The company established itself as a serious player in Hollywood last year after founder Efe Kacarel placed a big bet on material.
This substance has won an Oscar, Golden Globe and BAFTA. “We filmed this body horror film from a director that no one ever heard of and made it a cultural global phenomenon due to word of mouth,” Kacarel told the Financial Times.
Kacarel said despite recent success, he has not aimed at trying Netflix or Apple. “We don’t really compete with them. We have a completely different business,” he said, adding that Mbi’s goal was to “elevate great films, both classic and modern.”
The company plans to release more films this year, including the mastermind behind the first original film, director Kelly Leihart, and the father, mother, sisters and siblings of Paolo Sorrentino’s La Grazia and Jim Jalmusch.
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Despite the overall box office revenue, Kacarel believes that such films will have a healthy global audience, and pointed out that seven of the candidates for Best Photos of the year are indie, including winners, anoras, brutalists and substances.
“When you look at the box office revenue of specialized films, they’re growing very effectively year by year. I’ve seen 200 films at the box office in the last three years.
Sequoia has joined other outside investors in Mubi, including summit partners and Chinese billionaire Zhang Xin. She also sits on the company’s board of directors.
