How does Sweatcoin work and make money?

Company: Sweatcoin
Founders: Oleg Fomenko and Anton Derlyatka
Year founded: 2015
CEO: Oleg Fomenko and Anton Derlyatka
Headquarter: London, England
Type: Private
Investor Funding: 6.3M

Products & Services: Fitness Tracking and M-commerce App; Digital Currency
Competitors: Bitwalking | GymPact | Endomondo

Fun Fact:
Did you know that founder Oleg Fomeko came up with the idea for Sweatcoin when he lost his motivation to workout after his startup venture failed?

Table of Contents

About Sweatcoin

Sweatcoin is a phone app that tracks your steps. However, there is more to Sweatcoin app than just allowing you to keep track of your steps – Sweatcoin also rewards you for your activity with digital currency (sweatcoins) that can be used to buy products and services.

The products and services available for you to spend your sweatcoin on are primarily fitness and health-related, such as training sessions or workout gear.

You can also exchange sweatcoins with other users and donate them to charity.

how does sweatcoin work and make money ? — Image Source: Apple App Store | Sweatcoin App

The goal of Sweatcoin is to motivate people to exercise more by offering them real, tangible awards for the steps they take. The founders created the app to address the human need for instant gratification rather than delayed, long-term benefits, which is one reason many people have a hard time motivating themselves to work out.

The app is currently available in the U.S. and U.K.

How Sweatcoin works

Sweatcoin app keeps track of your (outdoor) steps
You earn one sweatcoin for every 1,000 steps
Use sweatcoins to purchase products and services in the app’s marketplace

Walk (or run) and earn sweatcoins

So how do users earn sweatcoin by walking?

Well, the Sweatcoin app automatically tracks your steps as you walk (as long as the app is running, so don’t ever totally shut down the app by swiping up).

Every time you walk or run, 1,000 steps, you earn a single sweatcoin.

One of the catches is that these steps must be taken outdoors, which the app verifies by using your phone’s location tracker. This means that steps taken in your home or at the gym won’t count toward earning sweatcoins. However, the founders are reportedly working on expanding to indoor steps in the future.

Sweatcoin Memberships

There are multiple tiers of Sweatcoin membership, and these tiers determine how many sweatcoins you can earn in a day.

The first, most basic tier, “Movers,” only allows you to earn 5 sweatcoins maximum per day. Even if you walked over 5,000 steps in a day, you would still only receive 5 sweatcoins for that day.
To earn more coins per day, users have to pay for “Shaker” membership, which costs 75 sweatcoins per month. Shakers are eligible to earn up to 10 sweatcoins per day.
Next, the app offers a “Quaker” subscription, which allows you to earn 15 sweatcoins per day.
Finally, “Breaker” membership allows you to earn 20 sweatcoins per day.

Spend your sweatcoins

The sweatcoins you’ve earned can be spent in the app’s marketplace, which features a variety of fitness and health products or services from a variety of vendors. Some of the goods available include yoga classes, training sessions, fitness gear, and even high-tech gadgets such as Apple Watches. The suppliers of the products and services in the Sweatcoin marketplace are brands seeking to target the app’s health-conscious user base.

Additionally, you have the option to send and receive sweatcoins from other users or donate them to charity through the Sweatcoin app.

How the app prevents cheating

While it may seem super easy to trick the step counter by simply shaking your phone, the founders of Sweatcoin are aware of this issue and have created a fairly foolproof method for verifying actual steps.

While your phone’s step sensor tracks your movement, an algorithm checks the phone’s data on speed, consistency of the movement, and location in order to identify false steps.

How Sweatcoin makes money

Sweatcoin generates revenue in three ways:

Freemium/subscription model
Commission model

Freemium model

As previously discussed, Sweatcoin offers several paid membership plans that allow users to earn more sweatcoins per day. Sweatcoin is free to download and doesn’t charge users for its most basic level, Movers, but allows them to upgrade their membership to gain higher earning potential.

Sweatcoin’s membership tiers are as follows:

Mover – up to 5 sweatcoins per day; free
Shaker – up to 10 sweatcoins per day; 4.75 sweatcoins a month
Quaker – up to 15 sweatcoins per day; 20 sweatcoins a month
Breaker – up to 20 sweatcoins per day; 30 sweatcoins a month

Commission fee

Sweatcoin also uses a commission model, earning a commission fee from brands for every product and service purchased through the app.

Brands – of which there are about 300 in the Sweatcoin marketplace ( Paypal Gift cards, Amazon gift cards)– are willing to pay this fee for the benefit of exposing their products or services to Sweatcoin’s customer base of fitness and health-minded consumers. This can help a brand grow its customer base and increase their sales exponentially.

How far Sweatcoin has come and its plans for future growth

The Sweatcoin app currently has about 10 million users. The app’s success has benefitted both from the growing trend toward fitness apps in general, as people become more and more health-conscious, as well as the distinctive feature of paying users for their steps, rather than just tracking them.

Although the company’s profits are unknown, the company has stated that its revenue has grown quickly.

And the Sweatcoin team has plans for even more growth. The founders plan on expanding the app’s capabilities to include the following:

tracking and verifying indoor steps,
launching an Android version of the app,
expanding globally and
securing more deals with healthcare providers, insurance companies, and possibly even employers.

Additionally, the Sweatcoin plans to focus on developing its digital currency and eventually allowing people to trade sweatcoins on the market.

“The ultimate vision is the currency,” says co-founder Derlyatka.

Conclusion

Sweatcoin has accumulated a massive user base in a short amount of time, proving that the app has a solid recipe for success. The app’s core function satisfies consumers’ need for instant, tangible rewards, while the business’s multiple revenue models allow the company to turn its popularity into profits.

References & more information