In the midst of record setting VC activity in Canada in Q1 comes the story of a once mighty Montreal-based startup gone bad. The Logic is reporting that workspace-on-demand provider Breather has been sold to Industrious National Management Company of New York for a shocking $3 million. Last December Montreal In Technology brought you news of a major shakeup at the company founded by Julien Smith and Caterina Rizzi, which did not seem promising at the time.
The sale price represents an exit worth roughly 2.3% of the more than $127 million USD Breather raised over multiple rounds from well known investors including Caisse de dépôt et placement du Québec, Real Ventures, Menlo Ventures, the family trust of by Shopify president Harley Finkelstein and Gary Vaynerchuk to name a few.
The Logic story explains that shareholders have until today to approve a deal that would see the company sold to US interests at a rock bottom price. The deal would be set to close on Friday. New Breather CEO Bryan Murphy had received the offer just a month ago, on April 20. Murphy had told the Globe back in December 2020 that his company’s business model does not and never did make sense. “We’re doing radical surgery on this company”, adding that Breather had been renting 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.
But it was not to be. Just four months later the company is being sold off and it remains unclear if its operations will continue in any form. Breather had a valuation in the 9-figures as recently as 2019.