Would you burn 5,000 calories a month for an extra $50? A new Chicago-based startup is betting you will.
Karrot Health has created a platform for employers to incentivize their employees to work out with monetary awards. Karrot’s platform tracks participants' fitness metrics through wearable devices, like an Apple Watch or a Fitbit, or through a smartphone, and then logs that data to inform their employers if they are meeting exercise goals.
If they are, employers have the option to reward employees with cash, bitcoin or with giftcards from companies like Amazon and Uber. Employees can also opt to have their rewards sent to a charity of their choice.
The startup, launched in 2017 by Kelley Halpin, is trying to compete in a health benefit marketplace, which right now, is fairly stagnant. Many companies offer free or discounted gym memberships to their employees, which can be needlessly costly if employees aren’t actually using them.
“We can offer benefits to any size company,” Halpin said. “Companies may spend an extra $20 or $50 a month [using Karrot], but compared to what you’re getting from it, it’s well worth the money. You’re going to have people that are healthier and happier.”
Not to mention, they are also going to cost less to insure for companies that offer health insurance benefits, Halpin said.
But Karrot is trying to set itself apart by allowing employers to monitor their employees progress, and do it in a more cost-effective way. Karrot only requires their clients to pay for their services if a given company’s employees are actually using the platform. Karrot charges the company $5 for every employee that reaches their fitness goal. Employees are not required to participate.
To be clear, though, Karrot doesn’t offer a gym membership or any other type of exercise facilitation. They only offer the platform for employers to monitor their employees’ fitness goals. In other words, participating employees have to find their own workout methods and routines.
Besides having healthier employees that are cheaper to insure, Halpin said Karrot could help companies find more success down the line from a staffing perspective.
“The biggest problem for almost every company is attracting and retaining top quality talent, and we’re sort of a nice little perk that you can offer,” he said.
Karrot is primarily operating as a B2B company right now, but Halpin said he is interested in adding a consumer element in the future, where anyone can access their behavioral and motivational coaching offerings.
Halpin wouldn’t disclose how many clients they currently have, but said it is in the double digits and that though most of their clients are in the Chicagoland area, they also have some in San Francisco, New York and Los Angeles.
This summer Halpin said he plans to raise a seed funding round to help expand Karrot’s team of four, which is currently working out of healthcare incubator MATTER.
“The potential for Karrot is huge,” Halpin said. “We have had a tremendous amount of growth organically, and a lot of it has come from employees trying to [improve] their companies. If you can make an awesome product that people really want, it does tend to sell itself.”
