- Sweatcoin is an app that rewards users with virtual currencies for exercising. The company behind the app was founded by Russian entrepreneurs Anton Derlyatka, Danil Perushev, Egor Khmelev, and Oleg Fomenko in 2014.
- Sweatcoin makes most of its money through brand promotions. When a user exchanges their sweatcoins for a reward in the app marketplace, the participating brand compensates Sweatcoin in the form of a commission.
- Sweatcoin partners with healthcare providers, insurance companies, and the government to encourage healthier lifestyle habits among citizens. Brands also compensate the company when a user watches an advertisement to earn extra sweatcoins.
Sweatcoin is an app that rewards users with virtual currencies for exercising and otherwise being active. The company behind the app was founded by Russian entrepreneurs Anton Derlyatka, Danil Perushev, Egor Khmelev, and Oleg Fomenko in 2014.
Derlyatka and Fomenko came up with the idea for Sweatcoin when Fomenko lost the motivation to exercise after his previous start-up failed. The pair, who are based in London and once climbed Kilimanjaro together, realized people didn’t exercise because they prioritized short-term pleasure over long-term gains.
Perhaps more to the point, Fomenko believed that exercise had economic value and set about creating a platform that gave users instant gratification for physical activity. Sweatcoin was subsequently launched in 2016, with the app paying users 0.95 sweatcoins for every 1,000 steps they take outdoors. Once a user has accumulated enough sweatcoins, they can exchange their currency for fitness gear, gift cards, shoes, workout classes, and even Apple watches.
To stop users from gaming the system, Sweatcoin uses a smartphone’s inbuilt step sensor to track movement. This is then verified by a proprietary algorithm that double-checks the readings for speed, consistency of movement, and location to eliminate any false data.
According to the company’s LinkedIn profile, there are now more than 40 million Sweatcoin members across 42 countries, with the United States representing the largest market.
Sweatcoin revenue generation
Sweatcoin works with over 300 brands that want to connect with health-conscious audiences. These brands encompass mindfulness apps, coffee companies, insurance companies looking to promote healthier lifestyles, and governments wanting to reduce their healthcare expenditure, among many others.
These partnerships serve two purposes. For one, they serve as the value behind each sweatcoin which encourages users to exercise.
Most Sweatcoin revenue comes from the revenue it earns from promoting other brands in the marketplace section of its app. The marketplace is where users can spend their hard-earned sweatcoin, and the company takes a commission from every “sale”.
The exact commission is negotiated between Sweatcoin and each brand. For some companies, particularly those selling fitness products, the arrangement is more likely to be lucrative.
Brand partnerships include those with larger healthcare and insurance providers. For example, Sweatcoin announced a partnership with Hannover Re where it provided the global insurance company with health-related data.
Another deal was struck with the National Health Service (NHS) in the UK to develop an exercise program for individuals considered a high risk of developing Type 2 diabetes.
Longer-term, the company is committed to working with local and national governments to help them encourage their citizens to be more physically active. In fact, Anton Derlyatka once noted that their big picture use case for Sweatcoin was to have the currency comprise some part of personal income tax.
The company is in all likelihood compensated for brand partnerships, but again, the exact amount is down to the contractual agreement between both parties.
A far less significant source of revenue is in-app advertising.
Users are offered a random number of sweatcoins for watching an ad, with the company making a small amount of money from the advertiser on per-view basis.
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