Sweatcoin, a fitness app that rewards users in monetary value, has raised $5.7 million in a seed round led by Goodwater Capital with participation from Greylock Partners, Rubylight, Seedcamp, and SmartHub.
Angel investors Justin Kan, founder of Twitch and Justin.tv, and Rain Lohmus, founder of LHV Bank, also contributed to the investment.
The Sweatcoin app, like many other health and fitness apps, tracks your steps but rewards users with sweatcoins based on data extracted from the phone’s pedometer. These tokens can be exchanged for goods like fitness gear or gadgets. By assigning a monetary value to exercise, Sweatcoin believes it can incentivise more people to get fit. Conveniently, Sweatcoin has announced the funding round at a point where people are still sticking to their new year’s resolutions to get in shape.
“We have a very bold plan to take the concept of fitness into the future which even includes the ability to pay taxes with sweatcoin,” said cofounder Anton Derlyatka. “This funding round will allow us to build out the product and technology team in order to scale even faster so that we can help millions of people all over the world attain better health.”
According to the company, it has five million users and its revenues grew 266% over the last quarter. Users earn one sweatcoin (SWC) per 1,000 steps. The company takes 5% of that. The company has partnered with a number of brands to provide goods and services that can be exchanged for these tokens. The vendors set the SWC price for their goods. For example, a yoga course can be bought for 35 SWC.
The app hasn’t been without teething problems. Users have reported issues with the accuracy of the number of steps tallied.
The company will use the funds to fine-tune the step counting algorithm and improve the user experience.
It has a longer-term goal of making sweatcoin tokens a fully-fledged cryptocurrency, added Oleg Fomenko, cofounder
“As we grow and execute upon our vision, we plan to develop an open-source blockchain DLT technology that will allow Sweatcoin to be traded like any other major crypto- or fiat currency,” he said. “We are out to fundamentally change the value ascribed to health and fitness and provide the motivation for people to lead better lives.”