Religion apps attract wave of venture investment

Faith-based, for-profit apps attracted $175.3 million in venture funding this year through mid-December, up from $48.5 million in 2020 and $6.1 million in 2016, according to PitchBook Data Inc.

The apps, which mainly fall under the Christian umbrella, offer services including meditation support, Bible study modules and podcasts. Most use a subscription model, where a fraction of the content is free but many features are locked behind a paywall.

The share of Americans with no religious affiliation rose to 29% this year from 16% in 2007, the Pew Research Center said this month. Yet a previous Pew survey, in January, found that a third of Americans said their faith had grown stronger during the pandemic—essentially, people who were already highly religious became even more religious.

Engagement for many Christian apps falls on Sunday, suggesting that people use the apps in addition to in-person fellowship, not as a replacement.

“I believe people are generally hungry for meditation and prayer," said Scott Malpass, an investor in Hallow Inc., a platform for Catholics that raised more than $50 million this year. Hallow, launched in 2018, helps users “build a habit of prayer" and connect with like-minded people, according to its website. Mr. Malpass is a former chief investment officer at the University of Notre Dame and sits on the board of the Vatican bank.

A similar app, Glorify, was designed to help Christians strengthen their faith. Co-founded last year by 22-year-old British serial entrepreneur Ed Beccle, the app in November raised a $40 million Series A funding round led by Andreessen Horowitz, with participation from SoftBank Group Corp.’s Latin America Fund and K5 Global.

Glorify has also received funding from celebrity investors including singer Michael Bublé, reality-television star Kris Jenner and late-night talk-show host James Corden.

Mr. Corden said he met Mr. Beccle at a dinner in Los Angeles. “As soon as he told me about Glorify I felt I understood it immediately," Mr. Corden said. “I grew up in a family of faith, and I saw that what Ed was doing was building not merely an app, but a community."

Glorify plans to use the new funding to expand its team internationally and create new content.

Connie Chan, a general partner at Andreessen Horowitz, said she has been following the sector for years.

“One thing that I’ve always thought deeply about is how do I find investments that are tied to what people deem to be a core part of their identity," Ms. Chan said. “When you look at these communities that people strongly identify with, that’s where they spend most of their time. That’s where you get longer-term retention."

Some clergy members are no fans of these platforms’ paywalls.

“I don’t think any religious app should be for-profit," said Msgr. Walter Rossi, a rector for the Basilica of the National Shrine of the Immaculate Conception in Washington. “Prayer is always free." Msgr. Rossi said he believes donations are acceptable, but charging a fee is inadvisable.

Others don’t see a problem with the subscription model.

Msgr. Stephen Rossetti, a research associate professor at the Catholic University of America in Washington, said he thinks charging a modest fee for religious content is fine. “Obviously, we don’t want people getting rich off the Gospel," he said. A more important consideration is whether the people offering this information are reliable, he added.

Mr. Beccle said anyone can use the free version of Glorify, adding that its for-profit structure allows the company to raise the money to attract the best talent and optimize the platform, he added. The paid version of the app is $7 a month or $48 a year.

Hallow, the app aimed at Catholics, also offers a free version, but the majority of content is available for a subscription fee of $9 a month or $60 a year.

The company recently raised a $40 million Series B round, with participating investors including Drive Capital, Teamworthy Ventures and Peter Thiel, the billionaire co-founder of PayPal Holdings Inc. and Palantir Technologies Inc.

Alex Jones, Hallow’s chief executive and co-founder, grew up Catholic but fell away from his faith in his teenage years. After returning to Catholicism with the help of meditation, Mr. Jones decided to build a platform that could help others like him.

“Folks are tired of the pandemic, tired of the political division," Mr. Jones said. “Folks are looking for a place of peace and a place of rest. Hallow’s real vision is to create that place of peace and rest."

The app—which has surpassed one million downloads—provides prayer modules, audio Bible stories and meditation support.

Ms. Chan said the market for these apps is still largely untapped. She points out that the YouVersion Bible app has logged more than 500 million downloads.

“It’s a nonprofit, but if that app was a for-profit company, it would have been a unicorn many times over long ago," Ms. Chan said. “Consumers have always been using these apps, but investors are now starting to realize some for-profit companies are being formed that are also delivering great experiences."

This story has been published from a wire agency feed without modifications to the text