cadoo Secures $1.5M to Gamify Fitness with Betting

Cadoo Secures $1.5 Million Seed Funding to Gamify Fitness with Betting

Cadoo, a US-based startup, is revolutionizing the fitness landscape by integrating a betting element into physical activity. The company aims to encourage individuals to prioritize exercise through the potential for financial gain – or loss. This innovative approach has resulted in the acquisition of $1.5 million in seed funding.

Funding and Investors

The seed round was led by Apollo VC, founded by Sam & Max Altman, alongside contributions from Dorm Room Fund. This investment will fuel the continued development and expansion of the Cadoo platform.

The Challenge Model

While the Cadoo application has been available since 2018, a pivotal “challenge model” was introduced in March 2020. This feature allows users to wager funds on achieving specific fitness objectives, such as completing a 10-mile run within 10 days or walking three miles over three days.

Successful completion of a challenge results in the return of the user’s stake, along with a proportional share of the entry fees contributed by those who did not meet the goal.

Diverse Challenges and Private Options

Cadoo offers a wide spectrum of challenges to accommodate varying fitness levels, “ranging from daily steps to marathon training.” Approximately 50 public challenges are hosted each week.

This month sees the introduction of private challenges, empowering users to create and manage fitness competitions for friends, family, or larger groups like companies and schools.

Verification and Integration

Activity within challenges is rigorously verified through API integrations with popular activity trackers and fitness applications. This ensures accountability and prevents fraudulent reporting.

The app currently supports integration with services such as Strava, Fitbit, and Apple Health.

A "DraftKings for Fitness"

Colm Hayden, CEO and founder, positions Cadoo as “DraftKings for your own fitness goals.” He emphasizes the platform’s ability to provide intense motivation for individuals committed to achieving their fitness aspirations.

According to Hayden, the app has already attracted around 7,000 users who enjoy the thrill of wagering on their fitness journeys.

Business Model and Completion Rates

Cadoo’s revenue model centers on collecting a fee from unsuccessful challenge participants before distributing winnings. This structure potentially incentivizes the company to establish challenges that are difficult to complete.

However, users retain control over their participation and financial commitment by selecting challenges they believe they can conquer.

The company reports an impressive 90% success rate among users who register for Cadoo challenges.

Future Expansion Plans

Hayden outlines plans to broaden monetization opportunities by offering winners fitness products, with a margin applied to these sales. Furthermore, the platform intends to extend beyond running and walking to encompass other verifiable goals.

“We are working to build a motivation platform that enables anybody to reach their goals,” he stated. “Financial incentives is an intense motivator, and 90% of users who sign up for Cadoo challenges reach their fitness goals.”

International Accessibility

Although based in the US, Cadoo utilizes PayPal for payment processing, enabling participation from users internationally – wherever PayPal is supported.

Investor Perspective

The Altman brothers of Apollo VC commented that Cadoo “makes it easy to motivate users to stay active with financial incentives.” They foresee the motivation industry pioneered by Cadoo becoming a significant application of digital currency.

Previous Funding

Prior to the seed round, Cadoo secured $350,000 through an angel round involving Cloud Money Ventures Angel Syndicate, Wintech Ventures, and Pioneer.

Gamification and Competition

The gamification of health and fitness is not a novel concept, with years of data-driven quantification and goal-setting fueled by wearable technology. However, the addition of monetary stakes introduces a new level of competition.

Cadoo is not alone in this space, with several apps offering financial rewards for weight loss or increased activity, often through digital currency redeemable for prizes.

Competitive Landscape

Other players in this market include HealthyWage, Runtopia, and StepBet.