A24 Scores Another Valuation Level-Up

Nothing says you’re not a scrappy indie film studio anymore like a nine-figure budget. 

On Wednesday, A24 — the independent film and TV house behind hits like Everything Everywhere All at Once and HBO’s Euphoria — scored a $100 million investment at a valuation of $3.5 billion. It’s the studio’s second major fundraise in as many years. But has A24 actually cracked a business model worth replicating?

Dream Scenario

With two Best Picture Oscars wins (that’s two more than Netflix), and highly memeable cool-kid branding, A24 has cultural cache. There may be substance in addition to style, too. For a decade now, the indie studio has relied on a strategy of spreading its bets across roughly a dozen-and-a-half releases per year, mostly with budgets of just a few million dollars, in hopes that a handful hit big. 

In 2022, it was enough to score a $225 million fundraising round at a reported $2.5 billion valuation. The cash came with an inherent mandate: get a little bigger, spend a little more cash, grow the audience beyond the arthouse crowd. In a Bloomberg profile of the company, published in February, executives and investors claimed the studio was profitable, but didn’t share specifics. And two years into the modest pivot, A24 seems to have proven enough for a 40% valuation bump:

• In April, the studio released Civil War, with a reported budget of $50 million — the highest in studio history — which has grossed more than $121 million at the global box office. It provides something of a test case that the studio can scale up.
• The studio has expanded its TV game, producing series for Netflix, HBO, and Showtime. It’s also signed a film-streaming distribution deal with Warner Bros. Discovery’s Max platform, and has forged into sports documentaries, starting with Stephen Curry: Underrated for Apple TV+.

“Our thesis is that they can build a big, independent, public company,” Ken Fox, current A24 board member and founder of Stripes, the private equity firm that led the 2022 investment, told Bloomberg in February. “They have the opportunity to be their generation’s global juggernaut.” Wednesday’s cash injection was led by Thrive Capital.

Zone of Interest: A24’s spread-your-bets strategy may be something Hollywood can learn from. The industry’s big guns have spent years now increasingly loading their film slates with major tentpole releases, the types of films that cost $200 million or more in hopes of making $1 billion. The problem? They’re increasingly starting to bomb. Case in point: The Flash, Indiana Jones and the Dial of Destiny, and The Marvels, each of which resulted in a net loss of around $150 million or more, according to a Deadline analysis. Of course, A24’s strategy isn’t exactly innovative. It’s simply what Hollywood did for decades, before the 21st century superheroes and sequels boom.