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In an internal video obtained by BetaKit, CEO Bryan Murphy said the temporary-workspace provider burned through US$120 million of its US$122-million publicly disclosed funding in an effort to become profitable by 2021. (BetaKit)

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Talking point: On December 5, The Real Deal first reported Breather had laid off 17 per cent of its overall staff. Murphy would not confirm the layoffs to The Logic at the time, noting instead that the company’s business had grown “over 250% in the past year.” Sources told BetaKit that the layoffs affected 17 per cent of the company’s 200 employees. Addressing the layoffs in the video—reportedly made the day they were announced—Murphy said the company wanted to “take an effort to flatten out the company, to clarify roles and responsibilities, and eliminate redundancy and align resources with our mission and operating plan.” He said Breather had spent US$1.1 million on software-as-a-service, and made US$8 million in cost savings, with another US$3 million looking to be saved. The result, Murphy said, was “up to 6 layers” of “redundancy that led to a lot of frustration and inefficiency.”

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In the first half of 2019, Breather, a Montreal-based flexible workspace provider, added the new spaces between San Francisco and Los Angeles. Its West Coast portfolio now sits at over 110 spaces. San Francisco locations include the Financial District, South of Market and South Beach. Its new Los Angeles space sit within West Hollywood. (The Logic)

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Talking point: The company has been actively positioning itself as an anti-WeWork by offering clustered, private office spaces, unlike WeWork’s shared-space offerings. In a March interview with The Logic, Bryan Murphy, Breather’s CEO, said its “hub-and-spoke” model clusters locations together to give customers access to more space. He declined to share which new markets the company was targeting, instead saying it would focus on existing markets like San Francisco and Toronto. Since October 2018, the company has also been offering long-term spaces in an effort to expand its consumer base; at the time, Breather said its 16,000 corporate clients were requesting longer terms. Despite these new additions, Breather is still nowhere near the scale of WeWork; the latter adds between 500,000 to 1,000,000 square feet of new space every month, according to a January CB Insights report. Meanwhile, these Breather additions for the first half of 2019 represent 30,245 square feet of space. “There’s always pressure to grow … We’re not one of those companies willing to grow just for growth’s sake,” Murphy said when asked if there was investor pressure.

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New CEO Bryan Murphy is the founder and former president of Tomorrow Sleep, a direct-to-consumer mattress startup, and was an executive at eBay after his e-commerce company, WHI Solutions, was acquired. The new appointment comes four months after Julien Smith, Breather founder and former CEO, stepped down to make room for an executive with “experience scaling a company through the next level of growth,” according to his statement at the time. (TechCrunch)

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Talking point: Murphy said Breather’s growth depends on its ability to expand its locations and partner with landlords globally. The company raised $60 million in June. Breather—which announced a plan in October 2018 that lets companies book for a month or more—is likely to go head-to-head with co-working incumbent WeWork. The latter recently received a scaled-back SoftBank investment of US$2 billion and announced its intention to expand into communal apartments and education. In Canada, Breather has spaces in Toronto, Montreal and Ottawa; WeWork counts Toronto, Montreal and Vancouver among its markets. Breather was included in the Impact Centre’s 2019 Narwhal list.

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The San Francisco-headquartered firm has brought in US$165 million for a fourth seed fund and US$55 million for a follow-on investment pool. Slow has backed Canadian companies like Breather, the on-demand workspace provider, and Herb, a marijuana content outlet. (TechCrunch)

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Talking point: Long-termism is in short supply in the tech world, and some industry insiders have been working on ways for startups to access more patient capital. “Pressure from investors to grow fast and monetize faster can lead to bad decision making and bad outcomes,” said Slow’s partners when they closed their third fund in 2016. Entrepreneur guru Eric Ries raised money in 2016 to set up a Long-Term Stock Exchange (LTSE), which would tie voting power to how long an investor has held shares and executive compensation to performance over longer periods. But the flip side may be too much patience. Last year, Robert Jackson Jr., a commissioner at the U.S. Securities and Exchange Commission, reportedly criticized the LTSE for giving founders and early investors too much power.