Stars align for astrotech: Astro startups' revenues get festival fillip

Despite an apparent dip in investments, several firms have reportedly been in talks to raise fresh capital this festival season

For astrotech (astrology-technology) startups in a deeply religious country, it was only a matter of when and not if. The ongoing festival and wedding season in India has proven auspicious for astrotech firms, resulting in a significant uptick in their revenues thanks to rising consumer demand.
 

This has opened the door for many of these firms to initiate funding talks, as investors are also hedging their bets on them.

Vama, a virtual astrology and spiritual platform, claims a boost to its operations by as much as 70 per cent during the festival period.
 

“The festival season has indeed been a dynamic period for Vama. We observed a significant 70 per cent growth in our e-puja segment during this season, showcasing the resonance of our platform with key cultural and spiritual events,” says Manu Jain, its co-founder.

Founded in late 2020 by Manu Jain, Himanshu Semwal and Acharya Dev, Vama provides easy acc­e­ss to e-pujas, e-darshans and astrology services to devotees. Its annual revenue run rate stan­ds at $2 million, with a network of around 300 astrologers.

Vama has also been able to generate in­vestor interest. Earlier this week, it raised $1.1 million in an extended seed round led by Wave­mak­er Partners, an early-stage investment firm. Vama has cumulatively raised $2.8 million in funding so far.

Bootstrapped astrology platform AstroTalk, one of Vama’s competitors, is also expecting a surge in revenue in the months of December and January.
 

“These spikes in revenue and growth are primarily driven by customer interest in knowing what to expect in the New Year. This is also the time when we see an influx of new customers,” explains Anmol Jain, co-founder, AstroTalk.

In FY23, AstroTalk reported revenues of Rs 282 crore, compared to Rs 115 crore in FY22, staging a remarkable 145 per cent year-on-year (YoY) growth. The company is now at an earnings before interest, tax, depreciation and amortisation (Ebitda) run rate of Rs 100 crore, and it is projecting revenues of Rs 600-650 crore for this financial year.

AstroTalk, which is valued at around $81 million, generates 95 per cent of its income from online ast­r­o­­logy consultations, raking in about Rs 1.8 crore a day.

“On the back of healthy growth and revenue targets of over Rs 2,000 crore in the next couple of years, we are preparing for an initial public offering by 2025-26,” says Jain.

The steady growth trajectories of astrotech startups have resulted in growing investor interest. Funding of such companies increased from around $881,000 in 2020 to $2.7 million in 2022, according to data from market intelligence platform Tracxn.

In 2021, these companies raised $24.6 million, in line with the overall flow of funds into the Indian startup ecosystem. Markets have since recalibrated, and the astrotech sector has witnessed just one funding round so far this year.

Malooha, an artificial intelligence-powered astrology software as a service startup in Bengaluru, managed to raise $635,000 in a seed round in September, led by California-based Streak Ventures LLC and other angel investors.

Although Melooha is at a pre-revenue stage and yet to go live with its offerings, according to its up­p­er management fundraising hasn’t been a challenge.

“While it is a $40-billion market in India alone, 30 per cent of Americans also believe in astrology, and so is the case with most other countries. So, astrology as a market is massive, and it is getting recog­nised now with the investor community,” says Vikram Labhe, founder and chief executive officer, Melooha.

Labhe says the firm plans to launch its iOS and Android apps in India on January 1, 2024, before taking its services to global markets.
 

Despite an apparent dip in investments, several of these companies — this includes the likes of Vama, AstroTalk, InstaAstro, Bodhi and DevDarshan — have reportedly been in talks to raise fresh capital this festival season. It may well materialise in the coming months as macroeconomic headwinds subside.

“Astrotech has been in focus due to the confluence of increased digital adoption, accessibility to affordable mobile data, and a growing cultural shift towards holistic well-being. Investors recognise the sector’s potential for meaningful impact and engagement, driving increased interest and funding,” says Vama’s Jain.

What has also been working for these companies is a focus on profitability and unit economics, a sentiment that has been gaining traction with investors across sectors.

“We have been profitable at scale, so our unit economics are in place and are growing well. Therefore, we have been seeing interest among investors,” said Astotalk’s Jain.

Spurred on by the increasing interest from customers and investors, these startups are poised to ramp up expansion of their businesses — be it in terms of international outreach, headcount, or technological capabilities.