How a VR Company Became the Airbnb for NFTs

JACOB LOEWENSTEIN STARTED off his talk at the Augmented World Expo by apologizing.

It was a small crowd—fewer than a hundred people, masked and spaced apart in Ballroom B of the Santa Clara Convention Center in the heart of California’s Silicon Valley, waiting to hear about collaboration software. Loewenstein is the head of business development at Spatial, a venture-backed startup that has spent the past couple years convincing enterprise clients they needed to strap on headsets and buy into its virtual reality meeting apps. But on Wednesday of last week, Loewenstein launched into a presentation on NFTs, virtual art houses, the Utah Jazz NBA team, and the curse of having been christened a “future of work” app.

“This is kind of a weird situation,” Loewenstein began. “For those of you who have used Spatial, you might be wondering, ‘WTF? What has Spatial become? How many more buzzwords can they throw out …’ And the answer is, infinitely more buzzwords if it helps us make money. Just kidding.”

Loewenstein may have couched the company’s money-making goals in humor, but Spatial really is following the money. Right now, that happens to be in the direction of the much-hyped NFT art market. NFT refers to “non-fungible tokens,” often described as certificates of ownership of digital assets. Some individual artists are raking in millions by selling not just a piece of digital art itself, but that tokenized proof of ownership. The token is managed on a blockchain, which means crypto is the default currency. According to a recent Bloomberg report, the crypto art market generated $3.5 billion in sales in the first nine months of 2021.

“The industry seems to be rallying around this idea of an interoperable, NFT-driven metaverse, which we think we serve in a unique, super-simple, and fast way,” says Anand Agarawala, Spatial’s cofounder and chief executive, in an email to WIRED. Spatial’s rapid transition from hosting VR board meetings to hosting NFT auctions is emblematic of the fast moves many tech startups have to make if they hope to sell a product that’s better and cheaper than what larger competitors could offer. But for Spatial, which had aligned itself with partners like Microsoft and was selling its software to clients like Mattel and Pfizer, the doughnut drift into the notoriously volatile world of NFT art seems especially risky.

Meta Masterpieces

Agarwala and Loewenstein say the change was more of an evolution than a pivot, to use the Silicon Valley parlance; their users dictated what Spatial would become. Sure, being able to appear as an avatar in a “holographic office” was useful, especially as the white-collar world embraced remote work during quarantine. Some office leaders had been using Spatial to host virtual team events, to give remote workers a sense of presence with one another. (I met with the Spatial team in their own app once, switching from the Meta Quest 2 headset to the web to a smartphone, all of which support the Spatial app. WIRED’s Julian Chokkattu has used Spatial too.)


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