Blue Wave

Good morning. In 1998, a British man named Karl Bushby began a journey that even Odysseus would have balked at, pledging not to return to his hometown of Hull until he had circumnavigated the world without using any vehicles. On Monday, he completed his trek.

Along the way, Bushby faced countless obstacles ranging from environmental (like crossing the frozen Bering Strait) to bureaucratic (like being detained in Russia for illegally crossing the border). He kept pushing through it all. His reward will surely be a lucrative book/movie deal.

Today’s reading time is 6 minutes.

Markets: Canada’s main stock index fell yesterday as steep declines from Shopify and Thomson Reuters following their respective earnings reports drove down the tech sector.

American voters delivered their verdict on Donald Trump’s job performance, and it turns out they are less than satisfied.

What happened: Democrats won healthy majorities in both the U.S. Senate and House of Representatives, giving them control over Congress for the remainder of Trump’s term.

Why it matters: U.S. politics will likely be deadlocked for the next two years. While Trump can still veto any Democratic legislative agenda, the Democrats will now be able to make Trump a lame duck president by blocking any Republican legislation and appointees.

For Canada: Cost of living was a major issue working against Republicans, and in that sense, this outcome could make U.S. politicians think twice about tariffs. But even a Democratic Congress won’t be able to scrap Trump’s tariffs, which have been imposed through executive orders.

What’s next: The focus of U.S. politics will now shift to 2028 and the contest to succeed Trump. The big question now is whether he will be able to maintain his dominance of the Republican Party, or if this defeat will break his grip.

Shopify misses revenue target for the first time since 2022. Shares in the Canadian tech giant fell as much as 17% yesterday — before closing down a less cataclysmic 8% — after its quarterly earnings report revealed it had juuuust missed analyst revenue estimates. The platform's merchants also brought in slightly less gross merchandise volume than expected. (BetaKit)

Canadian AI customer service firm to merge with U.S. company. Toronto-based firm Ada Support and U.S. firm Dialpad have reportedly agreed to merge in a deal that values Ada at US$430 million (significantly less than the $1.2 billion valuation it had a few years ago), sources told the Globe and Mail. Ada sells customer service chatbots to businesses; Dialpad sells AI-powered phone systems and call centre software to businesses. (Globe and Mail)

Toronto research hospitals find a better way to work together. A group of 14 hospitals signed an agreement establishing a shared operational framework meant to accelerate research collaboration and (hopefully) lead to more important medical discoveries. In trials, the framework reduced the average time to start a joint project by 75%. (TAHSN)

📡 What else is on our radar.

One of Canada’s biggest payment processors is being sold to a U.S. private equity firm.

If that’s yours, congrats, you have new owners and no say. What it means for your rates, fees and terms is still an open question, and if you’re on a contract, you’re along for the ride.

Helcim is headquartered in Calgary, and we’re here for the businesses that want to stay Canadian without the fine print. No contracts. No monthly fees. Rates that drop as you grow. Zero games. Why? Because it's fair — and that's the Canadian way.

The average business saves about 25% on processing fees with Helcim. It might just be time to make the switch.

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🤝 Meet Connor Renton. He’s the founder and CEO of Brodie League, North America’s largest rec basketball league with more than 50,000 players across 20 cities. What started as a side hustle in Burlington, Ontario, is now a $30 million business — one that just landed four investments on Dragons’ Den. We sat down with Connor to talk about Brodie’s rise, getting a DM from Mark Cuban, and why nobody really wants to give up on playing sports. 

What was the impetus for starting Brodie League? 

I played sports my whole life but I never really felt like I had the best experiences growing up. I had a lot of shit coaches. Overall, it just wasn’t great. Then I went to university and played rugby at Western, so I had relatively semi-pro sports experience. I also fell in love with [the video game] NBA 2K during my time skipping class. I remember graduating and being like, sick, I can’t wait to experience what I experienced with rugby, but for basketball. And my first experience with adult sports was just absolutely horrible. We had a stoned ref, the scorekeeper was eating a burrito. All types of crazy stuff. 

I don’t think anyone grows up dreaming of running a marathon or playing pickleball or doing Hyrox. That’s just the only thing available to us. Everyone wants to be in the NHL. They want to be in the NBA. They want to play the sports they played growing up. But you come out the other side, and unfortunately that whole world is built on the 0.001% of athletes who actually go pro. If you’re not part of that very select group, you get relegated to stoned refs. 

What was your experience pitching on Dragons’ Den like?

It was great. The hardest part is the first 60 seconds, where you have to get the business down. I fully blacked out while I was delivering it. I was just super nervous. But once you’re in the zone, it was easy. Every Dragon wanted in and we landed a deal with four of them. We went back and said, “Hey, we think we’re worth more than what we agreed to on TV,” and they all accepted, except for one. On TV, we agreed to a $25 million valuation. It actually landed at $30 million. 

Mark Cuban DMed me immediately after the Dragons’ Den episode went up. He said, “You went on the wrong show. You should come on Shark Tank.” We actually chatted with his team. But we know what we have. They wanted all sorts of concessions — a deal we couldn’t do. But they were interested as well, which is cool.

Where do you see Brodie in five to 10 years? 

I think we’re going to be bigger than the NBA. When you think of adult sports, I want you to think of Brodie. Twitch and YouTube and iPhones have let anybody become a content creator. In the same way, there’s no reason there can’t be a global league for basketball players, soccer players, football players, whatever the sport is. Ultimately, yeah, bigger than the NBA. I think that’s inevitable, to be honest. We’re the 99.9% of athletes who keep playing sports. And they tell us, “You can buy a jersey, sports-bet and sit in the stands, and that’s all.”

This interview has been edited for length and clarity. Read the full Q&A here.

All the places you begrudgingly eat at after going to Uniqlo could soon be under one umbrella. 

What happened: Canadian restaurant operator Foodtastic is trying to mount a hostile takeover of fellow operator MTY Food, looking to acquire its rival at a nearly $1 billion price tag. MTY has rejected two previous offers from Foodtastic, and this new bid comes just weeks after it completed a strategic review where it decided against selling the business.

Zoom in: Foodtastic and MTY are two giants of the mall food court and fast-casual sit-down joint. The former is the operator of 30 brands (like Milestones, Freshii, and Quesada), while the latter owns more than 80 (like Thai Express, Mucho Burrito, and Wetzel’s Pretzels).

Why it matters: Corporate consolidation has been an ongoing trend in this segment of the Canadian restaurant industry for more than a decade, but this marks a new development: a consolidator skipping the pursuit of just one chain and going after another consolidator. 

Our take: Retail Insider’s Q2 report namechecked Foodtastic’s “multi-brand franchising platform” as one of the main themes of Canadian food service this year. With Canada’s restaurant industry still unstable post-pandemic and 41% of operators reporting losses or just barely breaking even, consolidation could spread beyond food courts.—QH

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😬 15,610. Temporary foreign workers in Canada last year who applied for federal open work permits meant to help them leave abusive workplaces — a more than twelvefold increase compared to 2021. Out of those applications, more than 9,800 permits were granted.

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