Breather
The business, the turning points, and the decisions behind them.
01 / WHAT IT BUILT
What the company did
Breather was a Montreal-based startup founded in 2012 by Julien Smith that built a network of on-demand private workspaces - 'peace and quiet, on demand.' Users reserved quiet, furnished rooms by the hour through a mobile app (as little as 30 minutes), received a passcode to an electronic door lock, and used the space for meetings, focused work or rest, at rates of roughly $15-$40 per hour. At its peak it operated more than 300 spaces across 10 markets including Montreal, Toronto, New York, San Francisco, Chicago, Los Angeles and London. The company raised at least $73 million, including a $6 million round led by RRE and a $40 million Series C led by Menlo Ventures. It went bankrupt in December 2020, and its assets were acquired by Industrious in February 2021.
02 / Breather FAILURE REASONS
Failure factors supported by the current evidence
The Globe and Mail (27 May 2021) reported WeWork’s 2019 IPO collapse dried up investor interest just as Montreal flexible-workspace operator Breather sought funding; COVID then erased short-term rental demand (about half of revenue) and occupancy fell to 25%; CEO Bryan Murphy said the long-term-lease operator model did not make sense; US/UK subsidiaries filed insolvency after abandoning hundreds of leases.
WeWork’s failed IPO dried up investor interest in flexible office just as Breather sought new funding; a later round came only from existing investors.
The pandemic vanished demand for short-term rentals (~half of the business) and occupancy fell to 25%.
CEO Murphy told the Globe that leasing its own spaces ‘doesn’t make sense and, to be frank, I’m not sure it ever made sense.’
03 / EVENT HISTORY
Events in the structured record
- Bankruptcy
Globe and Mail: in fall 2020 Breather abandoned hundreds of leases and its US and UK subsidiaries filed for insolvency to wind up operations and repay creditors there.
- Bankruptcy
Globe (27 May 2021): selling most assets for US$3 million to Industrious after raising more than US$150 million; three bids each at a fraction of peak value; investors wiped out. Business Insider same week: ‘paying just $3 million… precipitous decline’ after shuttering US/Canada spaces.
04 / CONTEMPORARY REBUILD ASSESSMENT
Difficulty of rebuilding this project today
Material for this section is being gathered and checked. It will appear here once ready.
Overall assessment: Not completed
05 / CAUSAL CHAIN
How the factors connect
- 01
Breather was founded in Montreal in 2012 and grew to more than 300 on-demand workspaces across 10 global markets.
- 02
The company raised at least $73 million, including a $6 million round led by RRE and a $40 million Series C led by Menlo Ventures in 2016, with Real Ventures, Valar, Slow Ventures and RRE participating.
- 03
The COVID-19 pandemic crushed demand for on-demand workspace; Breather went bankrupt in December 2020.
- 04
In February 2021, flexible-workplace company Industrious acquired Breather's assets, integrating its locations and technology; the Breather brand continued under Industrious.
- 05
No reliable realized loss figure with clear subject, period and basis has been disclosed; funding raised is not a loss.