Lupe Fiasco's health startup higi acquires challenge and rewards platform Earndit

By Brian Dolan
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EarnditChicago-based higi, a digital health company that powers health kiosks in thousands of retail locations in the US, acquired New York and Seattle-based challenges and rewards platform Earndit last month. Financial details of the transaction have not been disclosed. Higi is the brainchild of serial entrepreneur Michael Ferro, who is also the owner of the Chicago Sun-Times. The company officially launched at SXSW this year and also counts Grammy nominated hip hop artist Lupe Fiasco as an investor and its creative director.

Earndit billed itself as a system that gives people more immediate rewards for their exercise, since the delayed, natural rewards of exercise are often not enough to keep us motivated. Since its founding in 2010 Earndit has generated $1.4 million in rewards for its users. The site has raised thousands more for charities that users can opt to donate to instead of taking rewards themselves. The platform gives users points for activity data logged by 11 fitness apps and tracking devices, including Nike+, Fitbit, BodyMedia, RunKeeper, Moves, MapMyFitness, and more.

"Higi's core offering is a high tech blood pressure kiosk like the ones you see at a lot of pharmacies, but theirs are all modern, internet-connected, and the data can get uploaded to a profile directly from the [kiosk] to keep a record of all your vitals. It measures your height, weight, blood pressure and [calculates your] BMI," Earndit CEO Andres Moran told MobiHealthNews in an interview. The higi kiosk creates a score for its users, but before the Earndit acquisition that score hasn't led to rewards.

Higi's kiosks are currently in more than 2,000 retail locations in 29 states. Stores including Publix, Whole Foods, and CVS have higi stations. 

"What excited them about Earndit was primarily three things: the integration with all these other devices and apps; the challenge platform we have, which is something they wanted to build; and the rewards system underneath it all," Moran said. "This is exciting though because now higi can measure so much and give rewards for so much data. You have not only the state of your body, like your vitals, but also those activities -- what you are doing to try to improve [the state of your body]. It's a more comprehensive picture."

Moran said that while the specific financial terms of the deal are not being disclosed the cash and stock deal was a good outcome for him and his co-founder Harry Kautzman II. Moran and Kautzman bootstrapped Earndit from the beginning so there were no outside investors -- "not a single penny" -- in the company.

Moran said that Kautzman and the other three Earndit employees will be joining higi to continue to run Earndit, but he's moving on to start a new venture focused on helping small businesses get loans. Moran will be onboard through the transition, however, and complete integration between higi and Earndit is expected some time in the first quarter of next year.

"When we started Earndit, we began with physical activity but it was always our vision to expand into other metrics and, specifically, biometric data," Moran said. "Interestingly enough, this acquisition allows Earndit within higi to reward people for those other metrics. It satisfies that vision we had really from the outset."

Earndit also launched an employee wellness business in 2013 that Moran said has been doing well and will continue through higi. Earndit offers employers co-branded rewards and challenges platforms that enable employers to offer employees additional, customized incentives. Moran said Earndit had sign up several public companies as customers already.
"That business has a lot of potential and we envision that aspect of the business overshadowing our regular direct to consumer side of the business at some point," he said.

Earndit's direct to consumer business had attracted about 110,000 unique users at the time of the acquisition, Moran said. He admitted the number sounded a bit low compared to the tens of millions you sometimes read about other platforms having but he said the company managed to extract "decent revenue" out of their user base. About one third of their users signed in every month to redeem rewards or join a new challenge, but the site automatically extracts data from the various apps or devices a user has so there isn't a need to check in frequently.

"Everything is going to continue on at full speed ahead," Moran said. "There is no aspect of Earndit that I know of will be falling away."

In a press release this morning, higi CTO Dr. Khan Siddiqui stated: “We are thrilled to integrate Earndit into the higi engagement platform. Earndit not only strengthens our philosophy of making health simple, interactive and rewarding, but also allows us to leverage Earndit’s activity tracking features into our platform, providing our users and partners the next step in their wellness journey.”