Toronto-based sleep tech company Smart Nora has filed for bankruptcy, BetaKit has learned.
The company, which produces a device to help reduce snoring, filed for bankruptcy on July 11 and appointed the law firm Rosen Goldberg as its trustee, according to a bankruptcy notice obtained by BetaKit and confirmed through a records search. Out of multiple checkboxes provided on the form, negative market conditions, a lack of working capital/funding, and an economic downturn are selected as reasons for Smart Nora’s financial difficulties. The document is signed by Smart Nora co-founder and CEO Behrouz Hariri.
Smart Nora claims it achieved more than $30 million in lifetime revenue through over 100,000 unit sales.
Smart Nora was founded by Behrouz Hariri and his brother Behzad through a 2015 Kickstarter campaign that raised just over $830,000 USD for a device that could subtly lift a pillow to reduce detected snoring. In 2023, Wirecutter reviewed six anti-snoring devices and named Smart Nora the best of the batch.
In an email statement to BetaKit, Behrouz said Smart Nora was in the process of raising capital to invest in growth for the launch of its next-generation product in the first quarter of 2025 when “the sharp and unexpected increase in tariffs” negatively affected investor sentiment. Behrouz noted that some investors said they would not consider investment in the connected hardware space until the following year.
“Unfortunately, this delay created a funding gap that we couldn’t bridge in time,” Behrouz said, adding that the volatility of the tariffs made it especially difficult to plan shipment to the US — Smart Nora’s largest market.
Canadian consumer goods companies BetaKit has spoken with since the United States implemented tariffs on imported goods earlier this year have noted how the rising costs and uncertainty have negatively impacted their business.
Smart Nora’s website does not mention its bankruptcy, and users who attempt to add the company’s latest product, the Nora Gen 2, to their cart are met with a pop-up notification that the product is out of stock. Many users on recent Reddit threads and review site Trustpilot have reported months-long delays in shipping for the product.
When asked about this, Behrouz said tariffs contributed to shipment delays, as tariffs imposed on its products eclipsed 200 percent at their height, leaving the company without any practical options to ship some of its new inventory. The bankruptcy filing lists $400,000 in “various customer deposits” as a liability.
The notice of bankruptcy values Smart Nora’s assets at $40,474, broken down into $31,470 in cash on hand, $4,000 in office furniture and equipment, and a $5,000 vehicle. Its inventory, securities, intellectual property, and book debts are valued at $1 each. The company’s liabilities total just over $4.3 million, including secured bank loans from the Royal Bank of Canada (RBC), the Business Development Bank of Canada (BDC), and Eastern Ontario CFDC. RBC is the single largest creditor with its $1.12 million loan.
Smart Nora is a consumer hardware product designed in Canada and manufactured in China, according to product photos, though SEC filings show that Smart Nora also incorporated as a Delaware limited liability company (LLC) in August 2024. Behrouz told BetaKit the company incorporated in Delaware as a requirement to offer an investment opportunity through crowdfunding platform DealMaker.
Smart Nora’s attempts to raise money even resulted in an appearance in an October 2024 episode of Dragons’ Den, where the Hariri brothers secured a joint $400,000 investment from dragons Brian Scudamore and Wes Hall for seven percent of the company (or six percent, if Smart Nora doubled its revenue). Behrouz posted a video on LinkedIn of his conversation with Scudamore discussing the investment this past April.
On Dragons’ Den, the founders claimed they signed a “top-three distribution partner” that would put Smart Nora in brick and mortar stores like Best Buy and Target. Smart Nora’s device does not appear on the website of either retailer. Behrouz told BetaKit the partnership was planned to launch alongside its second generation product, but that the unpredictability of tariffs led the company to launch with its on-hand inventory to consistently support its distributors.
They also claimed in the 2024 episode that Smart Nora was breaking even with annual sales up to $6 million before pandemic-induced microchip shortages slowed its development. The company then recovered and achieved approximately $2.7 million in annual sales, the founders said on the show. A statement of operations and deficit filed with the SEC in August says the company made just over $1.5 million USD in sales in 2023 and just over $1.64 million USD in sales up to August 2024.
The company continued its fundraising efforts in recent months, closing just over $210,000 through DealMaker in April, Behrouz said. He added that Smart Nora achieved more than $30 million in lifetime revenue through more than 100,000 unit sales. In a statement, Behrouz said he was “deeply thankful” for the Smart Nora team’s dedication, creativity, and hard work.
“With a lean and resourceful group, we developed and launched a novel hardware technology—an accomplishment that typically requires millions in funding,” he said. “It’s rare to see a hardware startup bootstrap to this level, and it speaks volumes about the ingenuity and resilience of everyone involved.”
With files from Douglas Soltys. Feature image courtesy Smart Nora.