Author: Erin Griffith / Source: New York Times
Photo Illustration by Alis Atwell; Shutterstock
As an Aquarius, David Birnbaum is naturally skeptical of astrology. But as an investor, he has zero doubts about the business potential of the $2.1 billion “mystical services market.” It’s an area that he has been trying, unsuccessfully, to invest in for nearly two decades.
Mr. Birnbaum researched lots of astrology start-ups in the Web 1.0 era but concluded then that they were not good investments. “They were pretty much just marketplaces sending traffic off to random astrologers,” he said. “They were definitely shady.”
This year he finally backed one: Sanctuary, an app that can be described as “Uber for astrological readings.” For $19.99 a month, you can receive a monthly one-on-one chat consultation with an astrologer. (The app also provides free daily horoscopes.)
Mr. Birnbaum’s decision to back a horoscope company through Five Four Ventures, the incubator he runs, “gets a lot of grins” from people in the finance world, he said. But they get it. Astrology is having a cultural moment, and for investors, that translates to dollar signs.
In recent years astrology traded its psychedelic new-wave stigma for modern Instagrammy witch vibes, and those vibes are very popular with millennial women. This means there’s money to be made. Start-ups — professional, non-shady ones with interesting business models — are bubbling up, eagerly raising funding from people like Mr. Birnbaum.
A few weeks after Sanctuary became available for download, Co-Star, an app that lets people download and compare their birth charts, raised just over $5 million in funding from the Silicon Valley venture capital firms Maveron and Aspect Ventures, as well as 14W, based in New York. Co-Star’s website promotes the fact that astrology allows “irrationality to invade our techno-rationalist ways of living.” The app has been downloaded more than three million times. Its Instagram account has more than 400,000 followers.
Banu Guler, the chief executive and co-founder of Co-Star, said not every investor she pitched was enthusiastic about her company and that some dismissed its practice area as pseudoscience. “I get that you’re not into astrology,” she said, “but if you had access to a 20-something or teenager who is a girl, that’s who you need to talk to.”
A third app called Pattern is spreading among finance and Hollywood types; it is founded by Lisa Donovan, the co-founder of Maker Studios, which sold to Disney for $675 million. Ms. Donovan said she hasn’t raised a formal round of outside funding yet.
Ms. Guler, a Scorpio with Cancer rising and moon in Leo, believes Co-Star can be “really big.” Bigger than the dozens of horoscope blogs or online shops selling crystals and tarot cards. Maybe even bigger than meditation apps, one of which was recently valued at $1 billion by investors.
Meditation, Ms. Guler said, is an antisocial way of interacting with the world. She views astrology as a form of collective wellness, with Co-Star helping people relate to each other based on star signs. Another big difference between astrology and meditation’s practitioners: Astrologers are not allergic to making money.
Co-Star is free, but users can pay $2.99 to compare their chart to that of a friend who isn’t a member. This is where the relating comes in. They can answer questions like, “Why did we get into that insane fight and why did you shut down?” Ms. Guler said. “Is it because you’re a Capricorn Mars? Maybe. So let’s talk about it.”
Anarghya Vardhana, a partner at Maveron and a Libra, said Co-Star has the potential to be…
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