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Cadoo gets $1.5M to gamify fitness with betting challenges
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.
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5 companies doing growth marketing right
What do all companies, regardless of industry, say they want? Growth. Lighting-fast, continuous growth. The good news is you can quickly learn which growth marketing strategies work by studying other companies’ success and adapting it to your own business.
Most technophiles remember Dropbox’s referral program — the one that helped it grow 3,900% in 15 months. Its philosophy was simple: reward customers with free storage space for referring other customers. In 2008, it was an absolute revelation. A golden ticket.
Tell a story with your business’ proprietary data. You’re the only one with this information, and that makes it valuable.
In 2021, you’d be hard-pressed to find a company without a formal referral program. It’s a standard growth marketing trick. If you study other companies’ tactics, you’re going to be able to shortcut growth — it’s as simple as that.
The race to grow faster is more pressing than ever before. When you consider the speed with which venture capital funds need to return dollars to their investors and that consumer acquisition costs have increased by 55% over the last three years, forward-thinking entrepreneurs and growth marketers simply must make time to study their competition, learn best practices and apply them to their own business growth.
Of course, you should still run your own experiments, but it’s just more capital-efficient to emulate than to trial-and-error from scratch. Here are five companies with growth strategies worth emulating — including the most important lessons you can begin applying to your business today.
Have you worked with an individual or agency who helped you find and keep more users?
Help us identify the best startup growth marketing experts!
1. Doing SEO right: Flo
SEO is going to spend this summer shaking in its boots. Google began rolling out a two-week core algorithm update on June 2, and it’s unleashing a page experience update through August. These updates usually come with significant volatility that makes organic Google rankings jump all over the place.
However, one clear winner of the 2021 SEO footrace is Flo, a women’s ovulation calendar, period tracker and pregnancy app. According to GrowthBar, a SEO tool I co-founded, Flo’s organic traffic has soared 192% over the past two months and it ranks on page one for some staggeringly competitive women’s health keywords.
If SEO is a strategy you’re pursuing, there are two key growth lessons to take away from Flo’s recent success.
1. Authority matters now more than ever. Healthcare websites fall into a category of sensitive sites that Google classifies as Your Money, Your Life (YMYL). Because of oodles of fake news and suspect web content, Google has rightfully raised its bar for expertise and factuality. Go to any one of Flo’s more than 1,000 blog posts (yes, content is still king) and you’ll see that nearly all of them are reviewed by gynecologists, primary care physicians or some other type of women’s health expert. Its site also has pages devoted to its writers and medical reviewers, content guidelines and peer-review specifications. Flo takes its information seriously. From the 2020 election to QAnon to vaccination side effects, Google is on high alert. Whatever your niche, you need to establish credibility to win Google searches.
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Strava raises $110 million, touts growth rate of 2 million new users per month in 2020
Activity and fitness tracking platform Strava has raised $110 million in new funding, in a Series F round led by TCV and Sequoia, and including participation by Dragoneer group, Madrone Capital Partners, Jackson Square Ventures and Go4it Capital. The funding will be used to propel the development of new features, and expand the company’s reach to cover even more users.
Already in 2020, Strava has seen significant growth. The company claims that it has added more than 2 million new “athletes” (how Strava refers to its users) per month in 2020. The company positions its activity tracking as focused on the community and networking aspects of the app and service, with features like virtual competitions and community goal-setting as representative of that approach.
Strava has 70 million members, according to the company, with presence in 195 countries globally. The company debuted a new Strava Metro service earlier this year, leveraging the data it collects from its users in an aggregated and anonymized way to provide city planners and transportation managers with valuable data about how people get around their cities and communities — all free for these governments and public agencies to use, once they’re approved for access by Strava.
The company’s uptick in new user adds in 2020 is likely due at least in part to COVID-19, which saw a general increase in the number of people pursuing outdoor activities, including cycling and running, particularly at the beginning of the pandemic when more aggressive lockdown measures were being put in place. As we see a likely return of many of those more aggressive measures due to surges in positive cases globally, gym closures could provoke even more interest in outdoor activity — though winter’s effect on that appetite among users in colder climates will be interesting to watch.
Strava’s app is available free on iOS and Android, with in-app purchases available for premium subscription features.
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CFIUS Cometh: What this obscure agency does and why it matters to your fund or startup
Evan J. Zimmerman
Contributor
Contributor
Evan J. Zimmerman is an entrepreneur, investor, and writer. He is the Chairman of Jovono and Chairman of the Clinton Health Access Initiative technology council. He is a partner and director in Mighty Mug/Mighty Products, Inc, and chairman of Brush Up Club, an innovative oral health company.
On January 12, 2016, Grindr announced it had sold a 60% controlling stake in the company to Beijing Kunlun Tech, a Chinese gaming firm, valuing the company at $155 million. Champagne bottles were surely popped at the small-ish firm.
Though not at a unicorn-level valuation, the 9-figure exit was still respectable and signaled a bright future for the gay hookup app. Indeed, two years later, Kunlun bought the rest of the firm at more than double the valuation and was planning a public offering for Grindr.
On March 27, 2019, it all fell apart. Kunlun was putting Grindr up for sale instead.
What went wrong? It wasn’t that Grindr’s business ground to a halt. By all accounts, its business seems to actually be growing. The problem was that Kunlun owning Grindr was viewed as a threat to national security. Consequently, CFIUS, or the Committee for Foreign Investment in the United States, stepped in to block the transaction.
So what changed? CFIUS was expanded by FIRRMA, or the Foreign Risk Review Modernization Act, in late 2018, which gave it massive new power and scale. Unlike before, FIRRMA gave CFIUS a technology focus. So now CFIUS isn’t just an American problem—it’s an American tech problem. And in the coming years, it will transform venture capital, Chinese involvement in US tech, and maybe even startups as we know it.
Here’s a closer look at how it all fits together.
What is CFIUS?
Image via Getty Images / Busà Photography
CFIUS is the most important agency you’ve never heard of, and until recently it wasn’t even more than a committee. In essence, CFIUS has the ability to stop foreign entities, called “covered entities,” from acquiring companies when it could adversely affect national security—a “covered transaction.”
Once a filing is made, CFIUS investigates the transaction and both parties, which can take over a month in its first pass. From there, the company and CFIUS enter a negotiation to see if they can resolve any issues.
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Zwift CEO Eric Min on fitness-gaming and bringing esports into the Olympics
The rumored IPO plans of $4 billion spinning brand Peloton marks the rise of a wave of interactive fitness startups like Mirror, Tonal, Hydrow and At Home 360 that combine a monthly subscription to recorded and/or live video classes with workout hardware.
There’s opportunity beyond this initial “Peloton for X” model, however, when you look at where the gamification of at-home workout experiences can overlap with actual games. We’re in the midst of rapid growth in the gaming industry, the rise of esports and the mainstream-ing of socializing within games due to Fortnite.
The virtual cycling business Zwift is a five-year-old startup that has raised more than $170 million as a pioneer of fitness-gaming ― physical sport carried out in a virtual world. Athletes join together for group rides and races within a cycling game that hooks up to their own bike trainers at home in order to reflect their movements and physical exertion. Because users are represented as players within a social game, there is the benefit of network effects, opportunity for in-game commerce and an audience viewing the competition.
I recently sat with Eric Min, Zwift’s CEO and co-founder, at the company’s London office. We discussed why he founded Zwift and how the product has evolved, the potential revenue streams available to an interactive fitness brand and Zwift’s rise as an esport with ambitions to enter the Olympics. Here’s the transcript:
Eric Peckham (TechCrunch): Do you view Zwift as a fitness company or as a gaming company where the bike trainer is just a controller?
Eric Min (Zwift): We’re the fitness company born out of gaming. While we’re a fitness brand, we’re also a game and social network, two things that are converging rapidly right now. What we’re trying to do, though, is build this social network around real-time experiences, physical experiences, and I think that’s far more interesting. Crucial to that is being hardware-agnostic though. We work with a lot of equipment out there so our users can come to the game easily.
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Google Fit gets a redesign, adds Heart Points and coaching
Google Fit is getting a major update today. The company’s activity tracking app has been around for a few years now but until today, it pretty much worked and looked that same as on the day it launched. Today’s redesign is quite a departure from that old look and feel, though, and it also introduces quite a few new features that help take the service in a new direction.
The most obvious new feature in the new version is that instead of only focusing on active minutes (or ‘Move Minutes’ as they are called now), Google has now introduced the concept of Heart Points. With this, you don’t just score points for moving, the app will also reward you for activities that actually get your heart beating a bit faster. Google Fit will give you one point for every minute of moderate activity and double points for more intense activities (think running or kickboxing). You won’t be able to buy anything with those points, but you’re more likely to live longer, so there’s that.
Like before, Google Fit will automatically track your activities thanks to the sensors in your phone or Wear OS watch. You can always manually add activities, too, or use apps like Strava, Runkeeper, Endomondo and MyFitnessPal to get credit for the workouts you track with them.
What’s also new in this update is actionable coaching, something that was sorely missing from the old version. It remains to be seen how useful this new feature is in day-to-day use, but the idea here is to give you feedback on how active you’ve been throughout the week and help you stay motivated.
What I’m actually the most excited about, though, is the new look and feel. Based on the screenshots Google has shared so far, the app now provides you with far more details at a glance, without having to dig into timelines (which weren’t all that usable in the old version to begin with).
The new version is now rolling out to Android and Wear OS users.
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Strava launches posts to bring athletes back for everything else beyond their workouts
When you walk upstairs at the Strava offices over on Third Street in San Francisco, you’ll find boards as tall as your typical human. They’re covered with images — screenshots of Instagram posts, comments and a whole lot of paper cutouts of other social networks printed onto little sheets — and they served as the launchpad for Strava’s latest product as it tries… Read More
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Instagram VP Kevin Weil joins board of social fitness app Strava
If you’re trying to build the Instagram for exercise, it helps to have the guy building Instagram for Instagram. That’s why Strava has added Instagram head of product Kevin Weil to its board of directors. Formerly SVP of product for Twitter, Weil has proven his skills through a rapid set of launches at Instagram, including its surprisingly successful Snapchat Stories clone. Read More
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