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VCs see promise in the religious metaverse—and a market of 6 billion people

April 29, 2022, 3:50 PM UTC

Hi Term Sheet readers! Jackson Fordyce here filling in for Jessica.

“Thank you, Lord, for this metaverse.” 

That unlikely combination of words was spoken by Pastor Pete, from Living Room Church’s service that took place recently in the metaverse.

Hosted on AltspaceVR’s platform, Living Room’s metaverse consists of two spaces, a living room where the service is held and a balcony where the other “attendees” (or at least their avatars) play cornhole, shoot off fireworks, and play basketball before the service begins. Michael Beck, who helps run the church, says that while some people may see this as “fake church”, church in the metaverse is “equally valid, beautiful, and real” as a physical church. After 15 minutes of hanging out, the avatars—about 30 are here today—shuffle into the living room for introductions. After intros, everyone joined in for a worship song that led to a message on Psalm 37 by visiting pastor, Pastor Pete. Once the sermon was over, the others in the group shared a bit about their lives, how the sermon resonated with them, and what they took away. 

One congregant named Darlene, or “Dar” as she’s better known in Living Room Church’s service, shared that the metaverse changed her life. Before the pandemic, she would have to be driven to church by her friend because of her disability. At church, she would attend a special needs service due to her anxiety disorder. Once the pandemic hit, she felt the cold loneliness of being isolated in her home. That is until she discovered a Christian community in the metaverse. 

There, she says she’s able to talk to her newly made friends, whom she calls brothers and sisters, every day. “They even threw me a birthday party yesterday.”

Living Room Church is just one of a fast-growing number of congregations in the metaverse that are attracting new Christians every day. From 2016 to 2021, global funding for religious and faith-based apps increased by 2,905%, according to Pitchbook. In 2021, these companies garnered $171.3 million in funding across 27 deals. 

Glorify, a London-based Christian worship and prayer app, recently raised $40 million in funding for their Series B led by SoftBank’s Latin America Fund, bringing its total funding to just over $80 million. Also backing the company are Andreessen Horowitz, Michael Bublé, Jason Derulo, and Kris Jenner. I got on a call with co-founder and CEO, Ed Beccle, who explained that Glorify is preparing its users for in-person church/community through aspects like prayer, meditations, music, etc. on their app. So, instead of pulling people away from a physical church community, Glorify is trying to enhance that experience for its users. 

With over 2.5 million users, Glorify is a free-to-use app but offers a $6.99/month subscription with more content. Glorify Plus includes all premium content, offline listening capabilities, listening to past daily worship, and more. 

Hallow, a Chicago-based Catholic prayer and worship app, is another Christian startup that attracted notable investors. The company raised $40 million in funding for its Series B last November from investors including Peter Thiel and Contrary Ventures. Alex Jones, co-founder and CEO of Hallow, highlighted that Hallow is a tool for the church and “should not and could not replace the church.” Jones explains that “as a Catholic, things like the sacrament and eucharist should be done in person.”  

Other religious/faith-based startups that have prospered in recent years include Evermos, a halal-focused social commerce startup for Muslim customers that raised $30 million in Series B funding in September 2021 from investors including UOB Venture Management, Jungle Ventures, and others. Wahed, an ethical investing platform that ensures all investments are halal raised $25 million in Series A funding in 2020 from BECO Capital and others.

Why so much interest right now? For VCs it comes down to a simple number, says Bradley Tusk, co-founder and managing partner of Tusk Venture Partners. Total Addressable Market. “It’s probably the biggest TAM of any sector possible. With over 6 billion people in the world identifying with some kind of organized religion, it’s a huge market and COVID made that so much clearer to investors.”

Tusk says he sees three ways to monetize a faith-based startup. The first is payment processing with tithing. When a congregant wants to tithe to their church, take a portion of that for processing fees. The second is to create a marketplace for religious goods. Tusk believes that “there’s no reason that you can’t have or create an Amazon specifically for digital and physical, religious goods…maybe even religious NFTs.” The third would be advertising revenue for a multifaceted church that has bible studies, bake sales, or volunteering opportunities.

Tusk says he finds the concept of church in the metaverse to be fascinating for a few reasons. He believes that while a digital church service can deprive a congregant of that physical interaction, the metaverse can mitigate that. Second, if there is a solid religious institution in the metaverse, you don’t need a digital or physical component. “Why spend the money building something, raising funds, and getting permits, when you can hire a really good Web3 developer, build your church in the metaverse, and it’ll probably grow a lot faster,” he says. 

Or, as Pastor Pete might say, praise the metaverse. 

P.S. Fortune’s mission is to help executives better lead and succeed—which is inextricably tied to health and wellbeing. That’s why we’re launching Fortune Well, a new health vertical dedicated to helping business leaders elevate their quality of life. Fortune Well will provide actionable tips for readers on how to manage stress, stay active, be more productive, maintain better relationships, and make better choices around their own well-being.

Jackson Fordyce
Twitter: @jacksonfordyce
Email: jackson.fordyce@fortune.com
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Jackson Fordyce curated the deals section of today’s newsletter.

VENTURE DEALS

- Coherent, a Tampa, Fla.-based no-code SaaS provider, raised $75 million in Series B funding. Maverick Capital and Maverick Ventures led the round and were joined by investors including Owl Rock, GreatPoint Ventures, Cathay Innovation, and Franklin Templeton

- Concert Health, a San Diego-based behavioral health medical group, raised $42 million in Series B funding led by Define Ventures and was joined by investors including Healthy Ventures, Vertical Venture Partners, Townhall Ventures, CommonSpirit Health, and Advent Health

- Madison Reed, a San Francisco-based hair coloring beauty brand, raised $33 million in funding led by Sandbridge Capital and was joined by Marcy Venture Partners.

- Vanilla, a Los Angeles-based estate and wealth management platform, raised $30 million in Series B funding led by Insight Partners and was joined by investors including Venrock, Michael Jordan, Bill McNabb, and others. 

- Enveil, a Fulton, Md.-based data security platform, raised $25 million in Series B funding led by USAA and was joined by investors including Mastercard, Capital One Ventures, C5 Capital, DataTribe, In-Q-Tel, Cyber Mentor Fund, Bloomberg Beta, GC&H, and 1843 Capital

- Exafunction, a San Francisco-based deep learning infrastructure company, raised $25 million in Series A funding led by Greenoaks and was joined by Founders Fund.

- Kard, a New York-based loyalty rewards platform, raised $23 million in Series A funding led by Tiger Global and was joined by investors including Fin Capital, s12f, and Underscore VC

- Synthesis AI, a San Francisco-based synthetic data platform, raised $17 million in Series A funding led by 468 Capital and was joined by investors including Sorenson Ventures, Strawberry Creek Ventures, Bee Partners, PJC, iRobot Boom Capital, and Kubera Venture Capital.

- Sumutasu, a Tokyo-based real estate marketplace platform, raised $8.4 million in Series B funding World Innovation Lab and Mobile Internet Capital led the round and were joined by investors including Mercuria Investment, CARTA VENTURES, Kiraboshi Capital, and others. 

- Ceryx Medical, a Cardiff-based heart disease-focused medical device company, raised £3.8 million ($4.76 million) in seed funding from investors including Icehouse Ventures, The Development Bank of Wales, Parkwalk Advisors, Business Growth Fund, and other angels. 

- Advanced Ionics, a Milwaukee-based industrial electrolyzer provider that can produce hydrogen, raised $4.2 million in funding led by Clean Energy Ventures and was joined by SWAN Impact Network

- Ribon, a remote-based fund donation application developer, raised $3.5 million in post-seed funding led by Valor Capital Group and was joined by investors including Bitkraft, Kenetic, Flori Ventures, 2TM funds, YGG CEO Gabby Dizon, Balancer CEO Fernando Martinelli

- Vesta Equity, a Los Angeles and Toronto-based home equity marketplace, raised more than $2.2 million in seed funding from investors including Woodstock Fund, Frontiers Capital, Supporters Fund, Greg Wolfond, and other angel investors. 

- BeSafe Group, the Rome-based parent company of BeSafe Rate, a travel and insurtech, raised €1.2 million ($1.27 million) in funding from investors including CDP Venture Capital and Prana Ventures SICAF.

- ​​52 North Health, a Cambridge, U.K.-based clinical A.I. and medical device-based system for cancer patients, raised £1 million ($1.26 million) in funding led by Cambridge Enterprise and was joined by investors including Crista Galli Ventures, King’s Health Partners MedTech Innovations, Meltwind, Milltrust Ventures, and other angels.

PRIVATE EQUITY

- EGYM, an HPE Growth portfolio company, acquired Gymlib, a Paris-based sports and wellness subscription for employees. Financial terms were not disclosed. 

- GI Partners agreed to acquire GTY Technology Holdings, a Boston-based cloud software solutions provider for the public sector. Per terms of the deal, GTY will become a privately held company. Financial terms were not disclosed. 

- MAG Capital Partners acquired a majority stake in Superior Concrete Products, a Euless, Texas-based concrete screening, sound walls, rail fences, and barrier systems engineer, manufacturer, and installer. Financial terms were not disclosed. 

- Mammoth Holdings, backed by Red Dog Equity, acquired Coastal Carwash, a Florida-based car wash operator. Financial terms were not disclosed. 

- Xpress Wellness, backed by Latticework Capital Management, acquired Integrity Urgent Care, a Bryan, Texas-based urgent care facility. Financial terms were not disclosed.

EXITS

- Fulgent Genetics acquired Inform Diagnostics, an Irving, Texas-based pathology laboratory, from Avista Capital Partners, for approximately $170 million. 

- Design Holding, backed by Investindustrial and The Carlyle Group, agreed to acquire a majority stake in Designers Company, a Copenhagen-based Danish design company, from Polaris. Financial terms were not disclosed. 

IPOS

- Bausch + Lomb, an Ontario-based contact lens maker, plans to raise as much as $840 million in an offering of 35 million shares priced at $24 per share. The company posted $3.77 billion in total revenue for the year ending in 2021 and reported $65 million in net income. 

SPAC

- SoundHound AI, a Santa Clara, Calif.-based voice artificial intelligence company, went public on the Nasdaq via a merger with Archimedes Tech SPAC Partners Co., a SPAC. The deal valued the company at $2.1 billion. 

PEOPLE

- K50 Ventures, a New York-based venture capital firm, hired Daniel Vasquez as partner. Formerly, he was with Celerix.

- Twelve Below, a New York-based venture capital firm, hired Byron Ling as partner. Formerly, he was with Canaan.

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