The New York Times

What's Their Sign? The Dollar Sign, of Course

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. Birnbaum researched lots of astrology startups 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.) 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, 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. Startups — professional, non-shady ones with interesting business models — are bubbling up, eagerly raising funding from people like 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 3 million times. Its Instagram account has more than 400,000 followers. Banu Guler, the chief executive and co-founder of Co-Star, said that 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 was founded by Lisa Donovan, the co-founder of Maker Studios, which sold to Disney for $675 million. Donovan said she had not raised a formal round of outside funding yet. 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, Guler said, is an anti-social 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 with 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?” 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 had the potential to be as big as Spotify, the music streaming app worth $24 billion, or Tinder, the ubiquitous dating app owned by Match Group. “It probably has this aura of being unscientific or whatever,” Vardhana said. But Guler “did a really good job of understanding all of that and rooting it in as much science as possible.” Co-Star promotes its use of artificial intelligence and data from NASA to track movements of the stars. Guler emailed a university psychology program asking if it would take MRI scans of people while using the app to learn about how people are reacting to it. She got no response. “Having money will help with that,” she said. —

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