Postcards from Elsewhere: Montréal, Canada

Whenever I go to international Endeavor events, people’s first instinct when finding out I’m Canadian is to say “Oh, I thought you were from the US!” Their second instinct is to ask “Why is Endeavor in Canada?”

I get it. Our culture is nearly identical, we speak the same language, consume the same media, and about 90% of Canada’s population live within 100 km of the US border. Our economies are hyper-linked, which means we may be commercially stronger than places you’d typically think of when we talk about Elsewhere markets. We won the geography lottery and can easily buy from and sell to our neighbours, and we have benefitted from that relationship.

Ironically, our great US-Canada relationship also made it easy for Canadian companies to leave. The challenge is that many successful companies move south as they scale, looking for a more favourable tax environment and better growth opportunities. Now, tariffs have left them vulnerable to the impact of tariffs and trade uncertainty.

Just last month, I was talking about this with Jim Estill, Endeavor Canada Board Member and CEO of Danby Appliances, who very wisely said, “Tariffs are a business person’s nightmare but an entrepreneur’s dream. The best way to be successful in entrepreneurship is to look for changes. And if you figure out what the changes are, you can take advantage of them.” 

His perspective is that there will be a little more of a barrier between the US and Canada, but the barrier goes both ways. They also have a hill to climb when selling into Canada. So maybe we double down on resources at home. We have two Endeavor Outliers — what we call the top performers of our global community — both of whom are fintech companies serving only the Canadian market, proving it is big enough to produce unicorns. In June, nesto, a digital mortgage company, raised CAD$302M ($218M), while app-based banking platform KOHO raised CAD$130M — each of them in Series E rounds.

But we should also find and export what we can do better than others. For example, AI is accelerating, but we’re not going to take on Anthropic and OpenAI. “That would be a stupid move right now for a Canadian company,” Jim shared. “But as it turns out, the climate in Canada is perfect for building data centres. They generate heat. Canada is kinda cold. They take a lot of electricity. We generate more electricity than we consume. It’s a matter of designing it in a way that is smart for the environment and helpful to communities, but it’s the type of opportunity we’re uniquely positioned to tackle.”

Canada’s proximity to the US is not its only advantage. This is an excellent place to build a company. We offer a high quality of life, from universal healthcare to safety and infrastructure. We have some of the best universities for technical talent in the world. We welcome immigrants — I did my PhD at the University of Toronto and was the only Canadian-born student in my program for three years — and have initiatives to make it easier for them to find community, but also fast-track processes for startup founders and employees in high-demand jobs. As a result, Canada helps spawn great innovation, from globally recognized brands like Shopify, a commerce platform with a market cap of $190B, to niche tech like Endeavor company GeologicAI, which gives mining companies real-time, high-resolution rock data. 

We are optimistic that, like past recessions or Covid, this will be just another business cycle, but one we will come out of more self-sustaining and self-reliant. My hope is that the government and large corporations will start buying even more from Canadian startups, that we will eliminate cross-province barriers to trade, build a more competitive tax regime that keeps our big successes at home, and strengthen relationships with other markets. I have no doubt that new companies will be born less dependent, with lower costs and better margins. Pressure creates diamonds. And to answer some people’s instinctive question, that’s why Endeavor is in Canada: to make sure they have every opportunity to shine from here.