Toronto real estate start-up TheRedPin has closed its doors and is now in the hands of a receiver.

The small online real estate brokerage had, in the last year, been working on a tech-based re-boot that its most recent CEO Keith McSpurren hoped would, using software and artificial intelligence, transform the real estate transaction for consumers and agents.

McSpurren was not available for comment on Friday.

Court documents posted by receiver MNP Ltd., say TheRedPin was insolvent and expected to run out of funds in July due to a “significant decline in sales.”

TheRedPin owes $3.7 million to Firepower Asset Management and a further $2.7 million to Trilogy Growth Fund, according to the documents.

McSpurren and TheRedPin’s directors resigned earlier in the week.

On Friday, the company’s Church St. office was closed and the door was answered by a man who identified himself as a representative of receiver MNP Ltd.

Founded in 2011, TheRedPin was among a clutch of pioneering online realtors known as virtual office websites or VOWs. It offered the full services of a traditional real estate company but also more online data and tools to inform consumers’ home search.

McSpurren, who had no real estate licence or background, was brought in for his start-up experience. He had hired a team of developers to help use software and artificial intelligence to enhance the home-buying experience and transactions for consumers and agents.

In the months he led the company, he streamlined the staff at the loft-like downtown headquarters from about 45 to 30 people. In February, he told the Star that TheRedPin had about 80 agents. But the posted court filing put that number at 40.

The company’s transformation plan may simply not have come together fast enough, said John Pasalis of the Realosophy brokerage, a virtual office website based in Leslieville.

“When you raise money from investors they want meteoric growth. They don’t want a small, profitable business. They want to get a steep profit out of it. That’s why they’re investing,” he said, adding that it is particularly tough to achieve the scale of business a brokerage needs if it is operating only in a single market as TheRedPin was.

It would have made the company particularly vulnerable given Toronto’s recently flat real estate market.

“If the business was struggling to begin with in a booming market and all of a sudden sales go down 30- or 40 per cent, that means their sales are going down close to that much as well,” said Pasalis.

The Real Estate Council of Ontario (RECO) posted a notice on its website Friday afternoon advising clients of TheRedPin to seek advice from their agents and their own lawyers.

Buyers and sellers concerned about deposits and agents seeking commissions were advised to contact the receiver.

Deposits are insured and RECO can help with trigger a claim when required, said the organization’s registrar Joseph Richer.

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“Ontario is one of the few jurisdictions that actually has commission protection insurance so the agents, if they can’t get their money, they too can file an insurance claim,” he said.

But Richer said concerned consumers and agents should reach out to the receiver first. Beyond that, they can contact RECO, he said.

Brokerages rarely go into receivership, but, as with any business, he said, it can happen. RECO also reaches out directly to provide information about the receivership to agents associated with the brokerage.