Cadoo, a US-startup that’s gamifying fitness by turning it into a betting opportunity, using the prospect of winning (or losing) cold hard cash to motivate people to get off the couch, has collected $1.5 million in seed funds from Sam & Max Altman’s Apollo VC and the student-focused Dorm Room Fund.
The app itself has been around since 2018 but in March 2020 it launched a “challenge model” that lets users stake money to join a challenge related to a specific fitness goal — be it running 10 miles in 10 days, or walking three miles in three days.
Participants who achieve the challenge goal get their stake back and a pro-rata share of losers’ staked entry fees.
A range of fitness levels are catered to by Cadoo’s challenges (“from daily steps to marathon training”), with some 50 public challenges hosted per week.
It’s also adding private challenges this month — which will enable users to host and configure fitness challenges for themselves/family and friends, or larger groups, such as companies, clubs, or schools.
Challenge-related activity is verified by the app via API data from activity trackers and fitness apps. (Which hopefully means Cadoo is smart enough to detect if someone has attached their Fitbit to their dog… )
The app has support for a number of third party fitness services, including Strava, Fitbit and Apple Health.
CEO and founder Colm Hayden describes the startup as “DraftKings for your own fitness goals”.
“Our audience consists of 25-50 year old fitness fanatics’ who use Cadoo to stay committed to their monthly/weekly fitness goals,” he told TechCrunch, adding: “When people are serious about a goal they are trying to reach, they want intense motivation to back their ambitions.”
He says the app has attracted around 7,000 wager-loving users so far.
Cadoo’s business model is based on taking a fee from challenge losers before their entry fee stakes are distributed to challenge winners — which does potentially give the business an incentive to set harder challenges than users are able to complete.
But of course it’s up to users to pick which challenges to enter and thereby commit their hard earned cash to.
It also claims that 90% of users who sign up for Cadoo challenges successfully complete them.
Hayden says it has future plans to expand monetization potential by offering winners fitness products — and taking a margin on those products. And also by expanding into other types of verifiable goals, not just running/walking.
“We are working to build a motivation platform that enables anybody to reach their goals,” he says. “Financial incentives is an intense motivator, and 90% of users who sign up for Cadoo challenges reach their fitness goals. We are making Cadoo much bigger than just running goals, and in the future incentivizing almost any goal verifiable on the internet.”
While the app is US-based payments are processed by PayPal and Hayden says it’s able to support participation internationally — at least everywhere where PayPal is available.
Commenting on the seed raise in a statement, Apollo VC’s Altman brothers added: “Cadoo makes it easy to motivate users to stay active with financial incentives. We believe the motivation industry that Cadoo is pioneering will be an important digital money use-case.”
Before the seed round, Cadoo says it had raised $350,000 via an angel round from Tim Parsa’s Cloud Money Ventures Angel Syndicate, Wintech Ventures, and Daniel Gross’s Pioneer.
Of course gamification of health is nothing new — given the data-fuelled quantification and goal-based motivation that’s been going on around fitness for years, fuelled by wearables that make it trivially easy to track steps, distances, calories burned etc.
But injecting money into the mix adds another competitive layer that may be helpful for motivating a certain type of person to get or stay fit.
Cadoo isn’t the only fitness-focused startup to be taking this tack, either, though — with a number of apps that pay users to lose weight or otherwise be active (albeit, sometimes less directly by paying them in digital currency that can be exchanged for ‘rewards’). Others in the space include the likes of HealthyWage (a TC50 company we covered all the way back in 2009!); Runtopia and StepBet, to name a few.
Source: New feed