Breather on Wednesday said it has raised $40 million in a Series C round led by Menlo Ventures.
The Montreal-born, New York-based startup offers on-demand spaces with classic-modern designs. According to the Wall Street Journal’s Scott Martin, Breather has tripled its footprint of spaces to more than 300 in 2016. It operates in San Francisco, New York and London, and this year it expanded into Los Angeles, Chicago, Washington and Toronto.
“Over the past year, we’ve seen hundreds of new businesses from a wide range of industries sign up every month,” said CEO Julien Smith. “The demand for Breather services is growing and we’re excited to partner with Menlo Ventures because of their experience and alignment with our vision.”
The new funding puts the company at $73 million. Breather’s funding round included previous investors RRE Ventures, Real Ventures, Slow Ventures and Valar Ventures.
The company declined to reveal its revenues to WSJ.
The spaces can be booked on short notice at hourly rates via a mobile app, with no monthly fees.
But the on-demand office space industry has become a crowded market with competitors including WeWork, Regus PLC and LiquidSpace Inc. Shared workspaces giant WeWork has raised $1.69 billion in funding and has a $16.9 billion valuation, according to industry tracker Dow Jones VentureSoure.
But Breather, wrote WSJ, “stands out with the attention it pays to minimalistic, uncluttered interiors in the designs of its spaces.”
The company leases about two-thirds of its spaces, typically at five-year terms, and the other portion are done in revenue-sharing agreements with landlords, Smith told WSJ.
Breather’s other expenses lie in paying for all the interior upgrades and furnishings.
Derek van Dijkum, a commercial real estate professional, told the newspaper that there are “easier ways in making money in real estate, frankly… We have no idea how this works in a down cycle,” he said.
But Smith told WSJ that capital costs aren’t a concern because he’s not doing major renovations like the large shared workspaces.