At a time when China’s zero-COVID policy continues to interrupt offline work and face-to-face interactions, Dominic Penaloza, the former head of innovation and technology at WeWork China, introduces a bold idea: on-demand work booths placed in public locations – and has managed to quickly raise capital for the company.
Penaloza named his new venture Peace in hopes of improving the mental health of those who use the company’s quiet, privacy-first space to avoid crowded offices and noisy cafes. Peace announced this week that it has raised a seven-figure round of funding from a group of business partners and entrepreneurs.
Peace is the latest in Penaloza’s ongoing experiment with flexible work. In 2019, the executive led an internal project to offer pay-as-you-go spaces at WeWork China. A year later, he went on to found his own proptech-focused startup studio, establishing a similar on-demand workspace service, but using third-party landlords.
Seven-month-old Peace launched its first batch of wearable pods last week in three luxury shopping malls and two office buildings in the heart of Shanghai. The plan is to deploy 1,000 in the metropolis within the next year, Penaloza said during a video call from one of the mall’s pods.
“We sell 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 don’t plan to put cameras… I think it’s more important to make our users feel like it’s really 100% private space. No one can hear what they say. And of course no one can see their screen or them.
Each Peace pod is 35 square meters in size with a conference table that can seat four people. The portable box comes with an app-activated lock, power outlets, Wi-Fi, soundproof walls and fans. It also features COVID-19 prevention technology provided by a startup called Lumen Labs which uses the new far UVC method to inactivate viruses and bacteria.
The long list of equipment explains the high cost of the pods – in the mid tens of thousands of yuan (1 USD = 7.16 yuan at the time of writing) to make one.
Penaloza thinks his team has come up with a sustainable revenue model. Each pod costs 11.25 yuan per quarter, but this is a reference price, the founder said, and in the future costs may vary based on location and real-time supply and demand. It’s not cheap – an Americano costs about 25 yuan in an average café in China’s top cities such as Shanghai and Shenzhen, but if four people shared the 45 yuan cost, plus the benefits that come with a pod – privacy and stable internet – and if Peace reaches a meaningful density, it could be a viable business.
Peace also found a sweet spot in its relationship with landlords, including retail spaces, office building lobbies, urban renewable spaces, transportation hubs, exhibition centers, and residential developments.
“We’re not renting the space,” Penaloza explains. “Our formula for working with real estate companies is one of our most secret sauces because, in landlord language, this hardware is actually an asset enhancement. It should be part of the renovation budget they have from year to year to make the building better and keep the building competitive so that Peace pods would attract white collar people to spend more time in a building.
“Even if we put it in an office lobby, even though 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 occupied and everyone needs a rest and occasionally quiet,” the founder added.
By working together with landlords, Peace also saves on maintenance costs. Since the COVID outbreak, the Chinese government has started asking closed space operators to clean their facilities after use. Peace’s tech platform automatically notifies the property manager at the end of each booking and a cleaner is dispatched to the pod, a process that can be as quick as spraying surfaces with disinfectant and wiping them down.
Investors in Peace is primarily made up 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, Penaloza itself, and Panda Eagle group.