Astrology: Venture capitalists put their money into the $2.1bn industry

The investment in Big Zodiac seems... preordained, says Erin Griffith

As an Aquarius, David Birnbaum is naturally sceptical of astrology. But as an investor, he has zero doubts about the business potential of the $2.1bn (£1.6bn) “mystical services market”. It’s an area that he has been trying to invest in for nearly two decades, without getting very far.

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 says. “They were definitely shady.”

This year, however, he finally backed one – Sanctuary, an app that could 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, he says. But they get it. Astrology is having a cultural moment and, for investors, that translates to dollar signs.

In recent years, astrology has traded its psychedelic New Age image for modern, Instagram-y vibes. This new style is very popular with millennial women – which 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 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 $5m 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, says 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 says, “but if you had access to a twenty-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 was sold to Disney for $675m. Donovan says she hasn’t 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 $1bn by investors.

Meditation, Guler says, 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. And there’s another big difference between astrology’s 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. It can help answer questions such as, Guler says, “‘why did we get into that insane fight and why did you shut down? Is it because you’re a Capricorn Mars? Maybe. So let’s talk about it.’”

Anarghya Vardhana, a partner at Maveron and a Libra, says Co-Star has the potential to be as big as Spotify, the music streaming app worth $24bn, or Tinder, the ubiquitous dating app owned by Match Group.

“It probably has this aura of being unscientific or whatever,” Vardhana says. 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 programme asking if they’d 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 says.

‘Changing how we operate as humans in the world’

The casual observer might attribute astrology’s surging popularity to the stereotype of the narcissistic millennial. Of course, the selfie-loving, nano-influencer generation is eager to hear that they’re unique and special. Horoscopes are a more personalised version of BuzzFeed-style identity content that’s designed to be relatable and shareable (“17 Things That Only People Named Jennifer Will Understand”, “28 Signs You Were Raised By Persian Parents In America” and the like).

“What’s better than something that is basically a story about you?” Birnbaum says.

But that explanation ignores what many in the astro-verse consider the major turning point for Big Zodiac: the election of Donald Trump. It changed everything, according to Aliza Kelly, the astrologer-in-residence at Sanctuary (she writes its horoscopes and conducts some of its readings). Watching The New York Times’ forecast needle tip from Hillary Clinton to Trump raised people’s doubts about certain scientifically proven systems, Kelly says. “People became so much more receptive to the idea of there being different ways of seeing the world,” she says. They turned to astrology “in order to create some sense of structure and hope and stability in their lives”.

Trump’s election inspired Guler to leave her work in fashion media and create Co-Star. “I was like: ‘We’ve got to figure out something more meaningful than what we are doing,’” she says. The role social media played in the election – and how “it is changing how we operate as humans in the world” – was a part of her concern, Guler says.

Investors see other trends feeding into astrology’s resurgence, Vardhana says. People are seeking smaller, specialised communities online, while participation in organised religion is declining. Millennials (and the rest of us) are lonely and want community, no matter how many followers we have on social media. Why wouldn’t we turn to the stars, moons, planets and houses of the horoscope?

“This is a phenomenon and maybe astrology and the technology of Co-Star is well equipped to address it,” says Vardhana. The challenge though, she thinks, will be converting more mainstream sceptics without “alienating the astro-nerds”.

Big Pisces energy

A few minutes into my reading on Sanctuary’s app, Kelly, my on-demand astrologer, asks me if her assessment of my birth chart rang true. According to her interpretation, last year was a very important year for me to redefine my values. As a Libra rising, my relationships are very important to me, she notes. And in the next few weeks, I should put myself out in the world to make connections.

“Sure!” I type into the app. It was just vague enough that if I did a little mental backbend, I could find examples to support her conclusions. I felt hesitant to share anything too personal about myself with a stranger until I remembered that by entering the date, city and precise time of day I was born, I had already bared my soul, astrologically speaking.

Sanctuary’s in-app readings are bite-size, designed to answer a specific question or dilemma. Sometimes, Kelly says, you just want to know why someone is being a jerk, or how you can best navigate that dynamic. You don’t need to talk about ancestral trauma.

Ross Clark, Sanctuary’s chief executive and co-founder, and a Leo, estimates that there are 100,000 self-employed astrologers in the country. Sanctuary is starting with around 30, who Kelly and the Sanctuary team will vet and train. He emphasises the app’s live one-on-one connections. “We’re not trying to be some sort of spiritual Alexa, where we’re using AI to replace someone,” he says. “If you think about the practice, it’s really emotional.”

The apps create a shortcut to intimacy. Armed with purported knowledge of your peers’ personalities, conversations can skip over the polite get-to-know-you small talk. In that way it doesn’t even matter that the science is actually fake. It creates a self-fulfilling prophecy where perceived intimacy leads to real intimacy.

When I interview Kelly, she mentions that this is a good story for me, a Pisces, to be doing.

Why? Because, she says, Pisces are spiritual healers and emotional philosophers. “The quest for spiritual awakening and enlightenment is what Pisces energy is all about. It’s in your blood.”

It feels like a convenient conclusion, given her company’s interest in getting me to write a story. Then again, who am I to argue with the stars? With my blood? It feels absurd, but also just satisfying and amusing enough that I don’t reject the suggestion. Instead, I say: “Sure!”

© The New York Times