At a time when China’s zero-COVID policy continues to disrupt offline work and face-to-face interactions, Dominic Penaloza, the former head of innovation and technology at WeWork China, is introducing a bold idea: booths of work on demand placed in public venues – and was able to quickly raise capital for the company.
Penaloza has named his new venture Peace in hopes of improving the mental health of those who use the company’s quiet, private space to avoid crowded offices and noisy cafes. Peace announced this week that it has raised a seven-figure funding round from a group of business partners and entrepreneurs.
Peace is the latest iteration in Penaloza’s ongoing experiment with flexible working. In 2019, the executive led an internal project to offer pay-as-you-go spaces at WeWork China. A year later, he moved on to found his own proptech-focused startup studio, which incubated a similar on-demand workspace service but tapping third-party owners.
Seven-month-old Peace launched its first batch of portable pods last week in three high-end shopping malls and two office buildings in the heart of Shanghai. It aims to deploy 1,000 across the metropolis in the next year, Penaloza said on a video call from one of the mall’s pods.
“We’re selling privacy on demand,” the founder said when I asked if the booths would be equipped with security cameras, an infrastructure that has become ubiquitous across China and often raises privacy concerns.
“We have no plans to put cameras… I think it’s more important to let our users feel that it’s really 100% private space. No one can hear what they are saying. And of course, no one can see your screen or theirs.”
Each Peace pod is 3.5 square meters large with a meeting table that can accommodate four people. The portable box features an app-enabled lock, electrical outlets, WiFi, soundproof walls, and ventilation fans. Peace is also exploring collaboration with LumenLabs, a startup that uses the new far UVC method to inactivate viruses and bacteria, which supposedly can fight COVID-19.
The long list of equipment explains the high cost of the pods: in the middle of tens of thousands of yuan (USD 1 = 7.16 yuan at the time of writing) to produce one.
Penaloza believes his team has come up with a sustainable income model. Each pod costs 11.25 yuan for 15 minutes, but this is a reference price, the founder said, and in the future the cost may vary based on location and real-time supply and demand. It’s not cheap: an Americano costs about 25 yuan in an average cafe in China’s upscale cities like Shanghai and Shenzhen, but if four people were to split the 45 yuan cost, plus the benefits a pod brings: privacy and stable internet — and if Peace reaches significant density, it could be a viable business.
Peace has also found a weakness in its relationship with landlords, including retail spaces, office building lobbies, urban renewable spaces, transportation hubs, exhibition centers and residential developments.
“Our formula for working with real estate companies is one of our most secretive sauces because this hardware, in owner-speak, is actually asset improvement,” Penaloza explained. “It should be part of the renovation budget they have year-over-year to improve the building and keep it competitive, so Peace pods would attract white-collar workers to spend more time in a building.”
“Even when we put it in an office lobby, even if everyone has an office upstairs, people still use it, especially in China where hybrid working is not yet popular, because small meeting rooms in offices are often fully utilized and everyone needs peace and quiet from time to time,” added the founder.
Working with the owners also helps Peace save on maintenance costs. Since the COVID outbreak, the Chinese government has started asking operators of enclosed spaces to clean their facilities after use. Peace’s technology platform automatically notifies the property manager after each booking is complete, and a cleaner will be dispatched to the pod, a process that can be as quick as spraying surfaces with disinfectant and wiping them down.
Investors in Peace consists primarily of entrepreneurs, including Joachim Poylo and Francois Ammand of Aden Group, Chris Brooke of Brooke Husband, Pablo Fernandez of CleanAir Spaces, Patrick Berbon of CM Venture, Hei Ming Cheng of Kailong, Wei Cao of Lumenlabs, lo Penaloza himself, and Panda Aquila Group.
The article has been updated to reflect that Peace has a rental agreement with the landlords.
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