Global workspace rental giant WeWork is now accepting payments in cryptocurrency. Find out what this announcement means for customers and for the company.
In its press release of 20 April, the company assured customers that they would not even have to convert to fiat currency. The commercial company has a dual objective in this project. The first is to offer customers the chance to pay their rent using a multitude of crypto currencies. The second aim of this project for WeWork is to be able to benefit from the increased value of currencies. This will be possible thanks to the preservation of digital assets.
However, including crypto currencies in its financial balance sheet also exposes the company to the high volatility of their price. In reality, it is not a pioneer, since the giant Tesla has also recently authorised payments in crypto currencies and integrated them into its cash register. Even so, according to the company’s CEO, Sandeep Mathrani, this is a no-brainer, “It makes perfect sense for us […] to add cryptocurrencies as a payment method,”
Cryptocurrency, WeWork’s new ally
This brings the total to five cryptocurrencies accepted for paying your rent. Firstly, two cryptocurrencies, bitcoin (BTC) and ethers (ETH). But you can also pay in stablecoins, USDC and PAX. Stablecoins are coins whose price and rate are more stable than other crypto currencies. These stablecoins are indexed to fiat or fiat currencies, commodities traded in bouses and other crypto currencies.
All backers and third-party partners can also be paid in crypto currencies by WeWork, if they wish. In addition, bank card payments will still be possible but are no match for crypto payments. Cryptocurrency payments have the significant advantage of being fast and inexpensive. Unlike bankcards, they have no additional charges. This decision on new payments could therefore definitely open the doors for WeWork. It will also expose it to all kinds of crypto-based businesses.
The partners
To implement this change and make these payment methods possible, the company is calling on two platforms. The first and by no means least is Coinbase, a platform for selling, buying and storing crypto currencies. This will help integrate crypto assets by safeguarding the company’s funds. Founded in 2012, Coinbase is now the largest platform for buying and selling cryptocurrencies. In fact, it is the first company to pay its dues to WeWork thanks to crypto.
The second company involved is Bitpay, which will be responsible for managing the various transactions carried out. Founded in 2011, Bitpay provides a payment service using Bitcoin. Using Bitpay is now more than essential. The company manages a large number of companies, such as WeWork, which have successfully entered the crypto market.
The creation of the property giant
Adam Neumann and Miguel McKelvey founded WeWork in 2010, in Soho, New York. The company provides premises and offers co-working. The aim of co-working is to enable professionals from different companies to work together in the same place. These premises are available on an international scale. At the outset, the idea was innovative, and the company quickly saw its activities flourish all over the world. But then came several complicated years that changed the dynamics of the business.
Difficult times…
WeWork has been through a series of upheavals since founder Adam Neumann’s mismanagement and subsequent resignation. Loss after loss, its flotation on the stock market in 2019 was viewed favourably. Unfortunately, the results have not lived up to expectations. The IPO was a disaster, putting thousands of jobs at risk.
More recently, WeWork finally succeeded in listing on Wall Street. This small victory was made possible with the help of an SPAC. A SPAC (Special Purpose Acquisition Company) is a special purpose acquisition company. These are structures listed on the stock exchange which, when the funds are raised, are kept in the form of cash. This money is used to finance the acquisition in question. It was the SPAC BowX Acquisition Corp that enabled WeWork to go public. The IPO was valued at $9 billion, a far cry from the $50 billion expected in 2019.
The Covid crisis has forced a large number of companies to introduce teleworking and social distancing for their employees. The company’s losses for 2020 amount to 3.2 billion dollars. At the beginning of that year, office occupancy was 72%, by the end it was 47%. So WeWork’s business has not fared any better. That said, with this announcement we can imagine that the company should be able to turn things around. Indeed, despite its many losses and difficulties in recent years, WeWork remains the most popular real estate company in the world.
WeWork’s plans
A number of innovations have been introduced to help the company get back on its feet. In 2020, for example, WeWork digitalised its property portfolio. To do this, it launched two products, WeWork On Demand and WeWork All Access. These new products allowed customers to choose how, where and when to work. Payment in cryptocurrency is therefore a project that pursues a desire to steer the company towards digital and technology. The current CEO, Sandeep Mathrani, clearly understands that crypto-currencies are the future of business. This decision to offer a new type of payment could well win the loyalty of new businesses. Some are already adept at using crypto-currencies, while others may well be seduced by the concept and take the plunge. All these projects and resolutions will enable the company to develop its technology and be more flexible.
How does the company work?
The company provides companies and employees with a range of easily accessible offices. Today, 500,000 people work in these premises, in 120 cities and 35 countries around the world. WeWork rents buildings that are then fitted out and leased back to the company’s customers. Whatever your company’s activities and number of employees, you are free to rent a small flat or several floors of a building.
WeWork offers flexible spaces with short leases, of one month for example. When a company expands, WeWork will make arrangements on its behalf to ensure a smooth transition to larger premises. Another important aspect of the property company’s service is the excellent Internet connection on its premises.
WeWork Paris premises
Co-working premises, 33 Rue Lafayette Paris
