Breather Products, a flexible Montreal-based workspace provider, has raised more than US $ 150 million to build a global business and now has most of its assets at Industrialious National Management Co. Sold for US $ 3 million.
Industrias is a coworking company with strong support from real estate giant CBRE.
Hard-working CEO Jamie Hodari has confirmed the acquisition. He expresses the company’s excitement for the purchase, adding that they will be a good caretaker of what they are buying.
Hodari didn’t confirm the price, but some sources say the deal is worth US $ 3 million.
Prior to the deal, Breather had been unsuccessful for the past two years. Founded in 2012 by business book author Julian Smith and designer Katerina Ritzy, the company has become one of the darlings of Canadian startups. They have raised significant amounts of investment from Silicon Valley investors such as Menlo Ventures and Peter Thiel’s Valor Ventures.
The breather signs a long-term lease and rents space to clients in a shorter period of time and at a higher rate. When former eBay executive Brian Murphy took over Smith in early 2019, the company already had 16,000 clients, including Google, Apple and the Royal Bank of Canada. We also have about 500 spaces in major cities such as San Francisco, New York, Toronto and London. The company’s revenue for the year exceeded US $ 35 million.
The series of misfortunes that Breather experienced began in August 2019 when the parent company of another coworking giant, WeWork, was released. Investors frowned on its business model and overall operations. As a result, the company downgraded and withdrew its IPO, resulting in temporary layoffs and eventually CEO.
Just as Breather was looking for new funding, it was a blunder that affected investors’ interest in flexible office companies.
Breather has raised between $ 35 million and $ 40 million, but only past investors have invested. This reduced the company to about US $ 100 million after raising funds. That same year, they fired 17 percent of their employees as a cost-cutting measure.
The breather recovered slowly in 2020, with 95% of the new space rented to clients. They started to grow and their bottom line increased.
Then there was a pandemic, whose occupancy had dropped to just 25 percent by last fall. Other flexible workspace companies have been hit hard as well.
The company did its best in that situation, but it didn’t help. Breather owners wanted to reduce their losses and were ready to sell.
In total, Breather placed three bids, each bidding at a fraction of the peak value. Industrias has acquired the Breather brand name and technology, as well as approximately 10 to 15 engineers.
Breather, Canada’s flexible workspace provider, sells most of its assets for $ 3 million-PlanetWeb.ca
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