Strava is an app for runners and cyclists. Over 85 million people use it worldwide. It offers a global feed of user activity, direct messaging, real-time tracking, competitions, and so much more.
Let’s take a look at Strava’S business model. We’ll examine each of its revenue streams in-depth and learn everything there is to know about them.
Strava runs on a freemium business plan. They make money from subscriptions, brand partnerships, and data monetization. The subscriptions start out as free, however, they require users to pay for premium services after the 30-day free trial has expired.
You like to read: 12+ Cool And Catchy Hipster Business Ideas to Start
About Strava
Strava has two main features: Social Networking and Personal Insights. Users can track their activities (such as running, cycling, etc.) with Strava and then share them with their friends so they can see where they’ve been. They can also connect with people who also use Strava.
Strava is an example of a business that survived the COVID-19 crisis by using innovative methods to market itself.
Business Model of Strava
Strava has a free version of their product, but they gradually migrate their user base towards paid plans. Their main competitors are:
- Tonal
- GOQii
- iFit Health & Fitness
- Oga Fit
With their freemium model, new users are encouraged to try Strava. However, many of their features are community oriented. Therefore, Strava waits for new users to become a member of their online community. Once the user gets comfortable, they have to upgrade to a premium package or get kicked out of their online community.
Free trials usually focus on new feature introductions. However, Strava uses these free trial periods to encourage people to join its community by offering them incentives for doing so.
Product/Service
Strava is an activity tracking application with various features. Some of these features include helping people improve their physical skills and encouraging them to become part of communities that share similar goals.
Strava is an app that was originally created for cyclists but has since expanded into 33 different types of activities.
Marketing
Because Strava works well with lots of different devices, including Garmin and TomTom, these companies end up becoming marketing partners for Strava. As a result, Garmin and TomTom users see the Strava application through their devices and thus potentially turn into new users.
Strava gets a lot of marketing from its user base and its blog. Servers use their Strava communities to stay motivated regarding their health and physical activity. As they discuss their different activities with each other, many Strava members choose to share their stories on the Strava Blog, which increases exposure to and interest in the app.
They’re not really secretive about their customer acquisition tactics, but they are pretty private when it comes to advertising on Google.
According to a study by Apple, using creative sets for screenshots increased the conversion rate of apps in the iOS store by 38%. Therefore, as a marketer, Strava‘s spending on ads through its own ad network has been well worth the investment. With Apple alone, it would be worth the spending.
Expenses
Because Strava isn’t a physical company, its staffing and office needs are different from those of traditional brick-and-mortar.
- Services that provide functionalities beyond those offered by basic web apps.
- Administering your application (making changes to your application)
- Infrastructure services (such as servers, CDNs, etc.)
- IT Support Service (Upgrades to your App, Bug Fixes, Etc)
- iOS and Android updates
- APIs Images data
- Data storage
- App update submissions
- Development tools, libraries, and resources for app developers
- Social & chat integrations
Plan for Profit
Strava is a company that focuses primarily on growth, so they don’t really care about profits. However, the COVID-19 pandemic has given them a big boost in their business, and they should be able to maintain this advantage for quite some period.
However, part of the company’s plan to eventually achieve financial stability is shifting certain free features into paid ones. It has already begun implementing these changes by offering some premium features for free. Although this change is not popular among many of its users, they are necessary for the long-term viability of the company.
How Does Strava Make Money?
Brand Partnerships
Between pure free and paid ads is the concept of branded partnership. Instead of simply bombarding their users with adverts from sponsors, Stravas instead decided to form a branded partnership.
For example, in the Strava app, these branded challenges are called “branded challenges,” which involve contests where participants can earn various prizes from health and wellness gear companies.
For instance, Le Col has offered 2500 GBP of LeCol winter clothing if the user can post four hours of activity every single weekday until the 31st of January.
Data Monetization
Users don’t actually “buy” Strava from them; rather they give Strava permission to use their data for commercial purposes.
Of course, followers who follow the Facebook business strategy understand the potential profits from user information. However, they also know that the potential for advertising is even greater.
Public Services Partnerships
Through Strava Metro, which allows cyclists and pedestrians to use their mobile phones to access maps and directions, Strava has partnered with various city departments in different countries to provide services for bicycle riders and pedestrian commuters.
- Planning
- Measuring
- Improving
According to Stravia Support, “Metro” is our company name.”
Technically, one might argue that StravaMetro doesn’t directly contribute to the company’s revenues, since it is a free app. However, one must remember that Strava operates under a freemium model, and therefore, free apps are considered promotional tools that draw potential customers who would otherwise pay for premium services. Strava Metro is an example of this.
Therefore, it can also be considered a way that they make money.
Subscriptions
Most of Strava‘s revenue comes from its paid subscription service. New user signups receive a free trial for one months before they’re charged $7.99 per year or $5 per year if they pay annually.
The free version of the app has these features:
- Activity Recording
- Device Support
- Social Network
- Beacon on Phones
One of the most basic features of any Health & Fitness (H&F) app is activity recording. However, Strava’s activity recording is enhanced by specific features like GPS tracking, live streaming, and social media integration.
- Compete on Segments
- Accelerate Training
Competitions allow the user to compete against themselves, their friends, and thousands of others.
Users can also do this by matching runs and rides on the exact same routes they’ve run before, so they can see how their performance has changed over time.
With Accelerate Training, users can upload their HR and power training logs and let Strava analyze how much exercise they’ve done and at what intensity. Additionally, Strava takes in training logs from most types of fitness devices.
Through Accelerate Training’s unique features, users can set custom training objectives, view their activity history, and connect training patterns to performances.
Device support lets Strava be compatible with a growing number of different types of mobile phones, tablets, laptops, etc.:
- Garmin
- Suunto
- Fitbit
- Bryton
- Magellan
- TomTom
- Polar
- Wahoo
- Timex
- Sigma
- Soleus
The premium version of the app includes all of the basic functionality of the free version plus some additional ones.
- Beacon on Devices
- Route Planning
- Segment Competition
- Training Dashboard
- HR & Power Analysis
- Advanced Metrics
- Goal Setting
- Training Log
- Compare Efforts
- Personal Heatmaps
- Partner Perks
With the free version of Strava, there are plenty of options available, but if you want even more functionality, then the premium version allows you to use some additional tools. Here are some further details from the Strava site about some of the premium functions.
With Beacon On Devices, you can get real-time location updates from Garmin and Apple Watch. Use it for safe activities and keep an eye out for friends and family.
With the Route Planner, you can plan and explore routes quickly. Get suggestions for runs and bike trips from anywhere in minutes, based on previous activity from other athletes.
You can use the Training Dashboard to track your progress over time and determine if you’re training effectively.
With the Personal Heatmap feature, you can see where you ran and rode every day for the past year.
With the launch of the Local Legends feature, within Competitions, Strava now offers film-quality promo videos for routes. These include the kind of video you normally see in mobile games. The person who has accumulated the most “effort” during a 90-days time frame on a specific ride becomes a local legend of the ride and receives a digital laurels crown.
Strava‘s free 30-day trials allow participants to compete for prizes during the Local Legends challenges, but if they don’t pay for a premium subscription within the 90-day period, they won’t be able to participate in the full 90-day competition. To increase its revenues, Strava implemented a new feature that enables it to generate 39 percent of its total yearly revenues in just 47 consecutive business days.
The SOLOdity Challenge was designed to help people stay active and connected during the COVID-19 crisis. It attracted almost one million new participants.
In an effort to keep people active during the coronavirus outbreak, Strava released a new feature called “Strava COVID-19 Challenge.” This challenge allows people to track their physical activity through the app and compete against others who also used the app during the same period. The company hopes that this competition will help people stay fit during the pandemic.
Strava Funding, Valuation, and Revenue
Since its inception, they’ve raised $151.9 million from investors including TCV. Their ability to raise money has gone up by 9x during the last 9 years.
Strava‘s value has increased dramatically, going from $1 billion to $4 billion since last year. The COVID-2019 pandemic was a major factor in its increase.
Strava‘s revenues have increased by more than 100% since 2014. These increases were largely due to Strava’s clever advertising and strategic business decisions.
Is Strava Profitable?
At this point, Strava is steadily increasing its user base, but it isn’t yet making any profit. Nonetheless, it continues to strive to provide value to its users by continuing to grow its user base toward profits.
CEO Michael Horvat has said that Stravastra is not currently profitable because its focus is on growing rather than making profits, but it is “on a path to profitability”.
Conclusion: How Does Strava Make Money?
Strava operates on an ad-supported free model and makes most of its revenues from advertising.
Now let us discuss Strava’s business strategy. We listed all of its revenue streams.
Overall, Stravak is a great app for athletes who want to organize their workouts and accurately track athletic activity using GPS.
It also includes an online community where people can compare themselves against each other. This way, they can set personal goals in order to improve their performance.
Strava is an example of a company that was built around its community. Because of this, it’s already a valuable asset.
You may like to read: 400+ Popular Dog Hashtags For Every Doggo, Every Situation
