Corporates going after 5G. Tesla says it's special. China's crypto investments.
VCs are investing in astrology.
According to an article in The New York Times by Erin Griffith, a small group of VCs have made bets on the psychic, mystical and astrological services market.
When I saw this, I had 2 thoughts/questions:
How large is this market in reality?
Is investing in this space somehow “shady”?
First, how large is the market?
According to CB Insights’ market sizing database (13,000+ market sizes and growing), the industry analyst consensus estimate for the psychic, mystical, and astrological services market is $2.05B (clients with access can see the estimates here and filter by geography as well).
So yeah — it is a pretty large market.
There is a related market which is even larger that we’ll cover below as well as some thoughts on the shadiness debate.
Nothin’ but a 5G thang
5G is one of the most anticipated upcoming technological advancements. With much higher data transfer rates, it could transform virtually every aspect of the mobile internet.
From Qualcomm to Huawei to Verizon, we take a look at 20 corporations that are vying to take the lead in 5G tech. See them all here.
My way and the highway
Yesterday Tesla hosted an event to update its investors on the state of its self-driving technology.
The company announced its plan to launch a fully autonomous robotaxi service by next year, and highlighted how its approach to autonomy differs from the competition.
I have to admit the first thought I had when I saw these astrology investments was “are folks really investing in pseudo-scientific nonsense like this that preys on dumb people?”
Yeah — pretty darn judgy.
A lot of tech Twitter voiced similar sentiments. Several VCs broke the unwritten VC bro-code citing the article and these investments as having gone too far.
Clearly, my first reaction was to agree.
But as I thought about it, I started to wonder where — and, more importantly, by whom — the line gets drawn.
Is unicorn and vaping sensation Juul ok?
What about any number of supplement companies hawking questionable and potentially dangerous products with pseudo-science underlying them?
What about “alternative lending” startups that lend money at slightly less usurious rates than the local check cashing place?
What about all the bro science companies hawking diets and food based on God knows what science?
The challenge, of course, is there is no real arbiter here.
If these companies really shouldn’t be invested in, who could drive that change? Limited Partners (LPs)? Regulators?
LPs who invest in these VC, private equity, etc. funds might require their funds not to invest in these types of businesses. ESG (environmental, social, and governance) investment criteria are gaining some steam but again, where would they draw the line? Would bro-science diets run afoul of ESG investors? Unlikely.
And for every LP who doesn’t invest, there will be others who will.
Private equity firms have investments in gunmakers, and you’d have thought after multiple US massacres they’d flee, but they haven’t. Money is money, I guess. #thoughtsandprayers
Perhaps the regulators can rein these things in. Former Food & Drug Administration commissioner Scott Gottlieb did target Juul, and seems to be driving some change there.
But in all likelihood, regulators will be overwhelmed and so have to probably focus on the largest risks. Will astrology even hit their radar? And even if they can regulate, will the penalties have teeth?
Gwyneth Paltrow’s Goop was fined $145K by California for selling eggs for vaginal wellness made of jade and quartz. But paying a $145K fine is peanuts for a company that brought in an estimated $60M in 2017.
Clearly, there is no easy, right answer here. Heck, there is not even clear agreement that there is a problem.
All I know is that I’m super excited to join a social network that will help me meet other anti-vaxxers. Someone, please fund that. Huge TAM!
China’s crypto startup scene is facing more and more regulatory uncertainty, but the country remains a hub for blockchain activity, accounting for around 25% of new blockchain projects worldwide.
We dig into China’s blockchain ecosystem, including investment trends, top companies, and most active investors in the space. Check it out here.
Bigger than astrology
So in the screenshot above for the psychic, mystical, and astrological services market, our technology identified a related market — “spiritual and religious.”
How large is that?
Interestingly, the market sizing estimates for this are massive and are all focused on India. Yup — $30B to $40B for just India.
But if you’re Indian or been to India, you probably knew this.
The amount of junk science and the number of shamans there is mind boggling. After my father died 2 years ago, I saw up close the Brahmin industrial religious complex. Its efficacy in extracting money from people would make any capitalist proud.
Follow the footprints
Sequoia Capital China has invested in companies across 8 countries. We take a look at the investment firm’s regional footprint and what it means for its global strategies.
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