Caterpillar, a new app that rewards healthy actions with redeemable points at entertainment and fitness outlets, will launch a pilot scheme on 6 June.

Under a collaboration agreement with the city council, the 12-week test period will be followed by an academic review from Western University Ontario and Leeds University.

The startup recently raised £450k funding from investors: £150k was from Jenson Funding Partners, £100k was angel investment and £200k was a shareholder equity investment.

Paul Baverstock, the founder, was formerly the NHS digital director of communications and director of engagement and communications director at the British Medical Association. Following an extensive dive into research and studies on adults’ responsiveness to incentive-based health apps, he developed Caterpillar, believing it to be the best way of delivering a better standard of health to the UK population.

Customers can connect health and fitness metrics trackers, such as Google Fit and Apple Health, to automatically enter completed activities and accrue loyalty points which can be spent on fitness and entertainment experiences such as gym sessions and cinema tickets, with partners including Vue Cinemas and gym aggregator, Hussle.

“We believe in the power of popular rewards, combined with behavioural nudges, to help people take better care of their health and prevent illness,” said Baverstock. “Healthcare systems across the developed world are struggling with the costs of treating expensive and avoidable ill health, from obesity to cancer, from Type-2 diabetes to heart failure. Physical activity and dietary habits are the key modifiable risk factors for preventable illness and that’s our focus.”

Digital platforms and apps that incentivise customers to exchange healthy activities for rewards is a trending area that continues to gain traction and grow. Hussle is currently involved with over 50 similar schemes, which, combined, provide a customer base of around 2.8m users.

In what is promising news for the fitness industry, Neil Harmsworth, COO and co-founder of Hussle says the company's data shows that “the tenure of the customer looks to be 40-50 per cent longer where gym access is through a rewards-based platform”.

“We think this is the trend to focus on,” said Harmsworth. “Fitness is hot at the moment in terms of the level of interest from organisations and agencies in other sectors that want to align their brands to healthier lifestyles, drive positive lifestyle choices, and provide their customers with a differentiated reward which has extremely high perceived value.”

In the past, rewards programmes have been commonly associated with free coffee, cinema tickets or fast-food deals. “These sectors have benefited significantly from the investment and marketing reach of other companies,” said Harmsworth. “There is a real opportunity now for the fitness industry to act as both the activity carried out, which generates a reward, but also to be the reward for the customer for some other behaviour. It can and should work both ways.”

Harmsworth says that there are two types of deal on the market: “incentivised-fitness” where exercise is rewarded or “fitness-as-a-benefit” where fitness itself is the reward for certain customer behaviours. “Hussle is being used in both ways with Caterpillar Health,” he said. “We provide both the access to fitness facilities, which is then rewarded, and we are also a rewards partner.”

Although Caterpillar will launch as a local scheme in Leeds, Harmsworth has a more ambitious vision. “We see real potential for a national roll-out of rewards-based behavioural programmes to help drive better health,” he said.

Baverstock’s hope is that Caterpillar Health will create a best practice model for long-term behaviour change. “Our vision for the app is that it will deliver market leading engagement for health promotion and education messaging, that it will deliver sustained behaviour change in physical activity and dietary habits, and that we will do that cost-effectively at scale.”