What will 2021 hold for Montreal founded Breather? While no one knows for certain, someone making an educated guess might say “turbulence”. Multiple reports have surfaced recently pointing toward significant challenges at the workspace rental company.
Last week US-based Bisnow published a story discussing how the company is being sued in New York for $90,000 in overdue rent. This coming on the heels of a story by Business Insider claiming that the company was working with experts to either sell itself or raise another round of financing. In either case, it may point to cash flow problems within this startup, which has raised over $130 million USD in funding, mostly between the fall of 2015 and the summer of 2018.
Travel restrictions and the social distancing demanded by the ongoing Covind-19 pandemic can’t be helping increase demand for meeting spaces either. Breather’s occupancy rate is reportedly now a paltry 25%.
On December 16, the Globe and Mail reported that Breather’s U.S. and U.K divisions have both initiated a liquidation process in their respective countries in and effort to repay creditors, and that the company will also be trying to find a way out of its remaining Canadian obligations. CEO Bryan Murphy telling the Globe his company’s business model does not and never did make sense. “We’re doing radical surgery on this company”, adding that Breather currently rents out its own spaces, which is very capital intensive, and he would prefer an Airbnb style of model under which the company would make third-party space available to the market. Murphy went on to explain that there may be an opportunity to work with commercial landlords who have seen vacancy rates spike due to the pandemic.
Breather currently has 97 employees according to Linked In. CDPQ and Real Ventures are investors in the company, among several others.