I forced SRTX’s Katherine Homuth to talk tariffs with me this week.
The CEO and founder explained on The BetaKit Podcast how the desire to solve one problem (great tights) led her to attempt tackling every problem related to modern textile manufacturing in North America. It’s a compelling story, and one that stands in stark contrast to recent conversations about productivity and ambition in Canadian tech. Give it a listen!
But we happened to record on the day of US President Donald Trump’s second inauguration, so I had to take the tariff opportunity. Consider it The BetaKit Podcast Tariff Tax™.
The long-threatened response to an imagined trade imbalance could emerge on Feb. 1 or after April 1, depending on whether you listen to Trump or his officials. Sunday evening, President Trump signed emergency 25 percent tariffs on Colombia for blocking US military deportation flights, so all timelines are fungible. So are the details.
“The biggest challenge for an entrepreneur right now is the uncertainty,” Homuth told me. She noted that startups have a variety of options available to them, from increasing prices, to prioritizing European markets, or setting up US operations to capitalize on lower tax rates.
“ Because we don’t know when it would hit, how it would hit, who it would hit, you can’t actually act on any of these different things. So you basically have to have a plan A through D.”
Planning for all scenarios will be time-consuming, costly, and chaotic. Assuming a four-year term, the tariff pain might also be temporary. Which led to Homuth’s final tip: “ Remember you’re building a business for the long term, not a business for just four years.”
Douglas Soltys
Editor-in-chief
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TOP STORIES OF THE WEEK
Shopify quietly kills Indigenous entrepreneurship program Build Native
Multiple websites related to Shopify’s Equitable Commerce programs are no longer active following the recent departures of the company’s Equitable Commerce and Build Native leads, BetaKit has learned.
Pages for the Build Native with Shopify, Empowered by Shopify, and Social Impact programs are no longer live on Shopify’s site. The Internet Wayback Machine indexed archived versions of these pages as recently as Jan. 18.
The removal of the Canadian e-commerce giant’s equity programs follows the quiet changes to its Acceptable Use Policy to allow for hateful content in November 2024.
Amazon to close all Québec facilities, hand over delivery to third parties
Retail giant Amazon is retreating from Québec, a move that will see 1,700 part-time and full-time employees, as well as 250 seasonal workers, laid off over the next two months.
The company said it will continue to deliver orders to customers in Québec through third-party distributors, similar to how it operated in 2020.
In an open letter to Amazon president and CEO Andy Jassy, Innovation Minister François-Philippe Champagne said he will review Canada’s business relationship with the company following its decision.
Champagne added that it is not too late to reconsider the decision, and that he would welcome the opportunity to further discuss the matter.
Liberal leadership candidates signal party pivot on capital gains tax rate changes
Candidates vying for the Liberal leadership race are reversing course on the party’s controversial capital gains tax rate changes announced in last year’s budget.
Former Finance Minster Chrystia Freeland’s team confirmed this week that she would not go forward with the policy she once championed, while notable candidates such as former Bank of Canada governor Mark Carney and former House Leader Karina Gould indicated plans to review the policy.
Paper looks to rebound from turbulent 2024 with new CEO Martina Tam
Embattled edtech startup Paper has appointed Silicon Valley edtech veteran Martina Tam as CEO following a whirlwind 2024.
Tam brings experience from various San Francisco-based tech companies, including early education platform Brightwheel, where she served as the chief operating officer and interim chief growth officer.
Last year, Paper lost both of its co-founders, laid off 45 percent of its head office staff, and cut the entirety of its Canadian tutor workforce.
Your “mouth commands attention”: Boardy CEO apologizes after emphatic negative response to Trump-themed marketing miss
Boardy CEO Andrew D’Souza has issued an apology after his new artificial intelligence networking tool commented on the appearances of its users in the style of US President Donald Trump.
While D’Souza encouraged users to post their results with the hashtag #MakeLinkedInFunAgain, the campaign was met with immediate and significant negative reaction, particularly from women.
When asked if anyone internally pushed back on the marketing mistake, D’Souza was transparent that he didn’t listen. “I didn’t totally understand what they were warning me about,” he wrote.
Xanadu claims networking breakthrough with new photonic quantum computer Aurora
Toronto-based quantum computing company Xanadu claims it has solved one of the key challenges facing the industry with its newly unveiled photonic quantum computer, Aurora.
Aurora, which builds on Xanadu’s previous X8 and Borealis systems, consists of four modular and independent server racks that are photonically interconnected and networked together.
“The two big challenges remaining for the industry are the improved performance of the quantum computer (error correction and fault tolerance) and scalability (networking),” Xanadu founder and CEO Christian Weedbrook said in a statement. “Xanadu has now solved scalability.”
Canada’s quantum sector got a big boost in general this week, as more than 100 quantum projects received nearly $80-million in combined federal funding.
Shopify president calls Montréal “the most entrepreneurial city on the planet” at North Star event
At HEC Montréal, just across the street from Shopify’s office, more than 300 members of the local tech ecosystem gathered to glean insights from different stages of the entrepreneurial journey.
The first edition of North Star, a new Montréal-based event series, kicked off with a panel of student founders running early-stage ventures, followed by a roundtable of established CEOs providing career insights, and capped off with a fireside chat between Economakis and Shopify president Harley Finkelstein.
Leaders from Clio, Certn, Humi and others talk M&A at TechExit.io
A wave of exits and acquisitions in the first few weeks of 2025 is signalling continued heat in Canada’s tech sector.
For those navigating M&A this year, TechExit.io offers a rare opportunity to dive into the world of mergers, acquisitions, and strategic growth. Set for Feb. 25, 2025 at the Vancouver Convention Centre, this one-day event has become a key stop on the M&A circuit. BetaKit is once again a proud media partner of TechExit.io.
Tickets for TechExit.io are on sale now, and BetaKit readers can snag 20 percent off with the code BETAKIT20.
FEATURED STORIES FROM OUR PARTNERS
When Tracey McGillivray’s 82-year-old father began struggling to stand after falls, she saw a problem waiting to be solved. Teaming up with engineer Liam Maaskant, they developed a walker with an integrated elevating seat, and over five years, refined it from rough prototypes into a near-market-ready product.
Halifax-based Axtion is part of a wave of Atlantic Canada startups funding their early work through grants and bootstrapping instead of venture capital. Talis Apud-Martinez of Emera ideaHUB believes this ecosystem allows startups to scale without having to give up equity.
Read more about how these startups are getting creative about growth.
Weekly Canadian Deals & Dollars
- VAN – Moment Energy secures $21.5M CAD Series A round
- TOR – AstraZeneca invests $820M CAD to grow Ontario footprint
- TOR – MolecuLight raises $39.5M CAD for bacteria-detecting device
- TOR – Basetwo closes $16.5M CAD Series A round
- TOR – DMZ receives $3.5M for new housing innovation accelerator
- TOR – Street Context acquired by BlueMatrix
- MTL – QueerTech launches new accelerator for 2SLGBTQIA+ entrepreneurs
- MTL – Novacap raises $1.43B CAD for digital infrastructure fund
The BetaKit Podcast — Katherine Homuth wants to solve for everything
“This is worth the pain of attempting to figure out how to do it. But attempting to figure out how to do it required us to basically rethink everything about that traditional outsourcing model.”
Katherine Homuth, founder and CEO of SRTX, the maker of Sheertex, explains how attempting to solve one problem with tights led her company to attempt solving for all problems related to modern North American textile manufacturing.
The BetaKit Quiz — This week: Boardy’s blunder, Xanadu’s quantum breakthrough, and Paper turns the page
Think you’re on top of Canadian tech and innovation news? Test your knowledge with The BetaKit Quiz for Jan. 24, 2025.
Feature image by Daniel Torok.