Chunmyung and Company, the operator of its namesake fortune-telling app, announced on Tuesday it has secured Series A funding worth five billion won ($4 million).
Menlo Park-based Altos Ventures Management, Inc. led the funding round; and existing investor Spring Camp made an additional investment.
Industry insiders say Altos' latest investment in a South Korean startup is rather unique. Unlike the venture capital firm’s previous investments in the country’s startup ecosystem, they viewed Chunmyung’s success as largely dependent on factors unique to the Korean peninsula.
Altos has invested in real estate app Zigbang and fintech startup Viva Republica Inc., the operator of mobile banking platform Toss.
In this case however, Altos Ventures is focused on the fact that the culture of seeing fortune tellers sometimes plays the role of therapy for South Koreans.
Altos Ventures partner Oh Moon-suk said: “Even though fortune telling provides entertainment and can even soothe anxiety over an uncertain future, there was still asymmetry in available information about the services. We decided on the investment because Chunmyung is imbuing legitimacy into the sector and working to improve its quality.”
Chunmyung connects users with fortune tellers in divination, tarot reading, and various other services
Chunmyung.com and its app are online-to-offline (O2O) platforms that connect customers with fortune-telling services around the country; be it traditional divination or Western concepts like tarot card reading.
While fortune-telling enthusiasts previously had to rely on word-of-mouth, Chunmyung uses machine learning technology to offer customized recommendations. The app even has voice recognition technology that it uses to take notes of the consultations.
The app offers a full refund for unsatisfactory consultations.
Online-to-offline commerce is a business model that draws potential customers from online channels to make purchases in physical stores. In the case of Chunmyung, the route is from the website or mobile app to fortune tellers’ establishments.
Fortune tellers can enjoy a consistent stream of new clients through the platforms and minimize the monotonous work of scheduling and more.
“We are seeing a rise in the number of fortune tellers who make more than five million won per month through Chunmyung,” the startup claimed.
Since the service launched in January 2020, Chunmyung and Company has doubled in size every quarter.
At present, it boasts 400,000 monthly active users and some 800 fortune tellers.
Some say that Altos chose to invest in the fortune-teller liaising app for its potential to break into neighboring markets.
The global fortune-telling market size is anywhere between 10 to 50 trillion won with strong demand in Japan, India and Southeast Asia.
In neighboring Japan, in particular, divination-related services provider Zappallas Inc. and fortune-telling content creator Media Kobo Inc. have become public companies.
“We aspire to become ‘delivery heroes’ in the segmented fortune-telling market,” said the startup’s co-CEOs Yoo Hyun-jae and Jun Jae-hyun.
Write to Da Eun Choi at max@hankyung.com Jee Abbey Lee edited this article.
