TMX Group's $800-Million MEMX Bet Signals a Strategic Pivot Away from Canadian Dominance
John Odermatt founded MEMX in 2019 with a simple pitch: the big three U.S. exchanges had gotten too expensive and too slow to innovate. Five years later, Odermatt's upstart holds roughly 3% of U.S. equities volume and a seat at the table with Nasdaq and the NYSE. Now TMX Group Ltd., which operates the TSX and TSX Venture Exchange, is paying $800 million for the majority of it.
The price tag alone tells you something about where Toronto's priorities are shifting. TMX has spent the last decade watching Canada's IPO pipeline dry up every time commodity prices slide and watching Bay Street fail to land the tech unicorns that list in New York instead. The MEMX acquisition, expected to close in 2026 pending SEC approval, is the clearest signal yet that TMX has decided the path forward isn't fixing Toronto. It's buying into somebody else's growth market.
The concentration bet nobody wants to call by name
Canadian equity markets have a problem that polite people call "sector concentration." The blunt version: too many banks, too many miners, not enough of everything else. As of early 2026, financials and energy still account for roughly half of TSX market cap. When oil drops or credit tightens, the whole index moves together. TMX collects listing fees and trading commissions on all of it, which means the exchange operator's revenue correlates uncomfortably with a handful of cyclical sectors.
MEMX doesn't solve that problem, but it sidesteps it. The U.S. equities market is 20 times the size of Canada's, and while the Big Three exchanges still control the bulk of volume, the fragmentation creates room for a fourth or fifth player willing to compete on price. MEMX launched as the low-fee disruptor, targeting broker-dealers and high-frequency traders tired of paying Nasdaq's data fees. It worked well enough that TMX is now paying a premium for a 3% market share most people would call marginal.
The math makes sense if you squint. A 3% slice of U.S. equities volume generates more revenue than a dominant position in a smaller, slower-growing market. TMX is trading Canadian market share it already owns for American market share it can grow into. The risk is execution. Integrating a U.S. exchange while managing VettaFi, the $1.1 billion data and indexing firm TMX acquired in 2023, is not the same as running the TSX on autopilot.
What TMX is actually buying
The MEMX deal isn't about trading volume. It's about the data underneath it. By controlling the exchange, TMX gains the right to package and sell proprietary market feeds to the same algorithmic traders and institutional desks that generate the volume in the first place. Non-trading revenue now accounts for more than half of TMX's total revenue as of 2025, and the MEMX data feeds slot directly into that capital-light model.
This is the same playbook TMX used with VettaFi. Buy the infrastructure that generates data, then sell that data back to the market at margin. The TSX listings business produces transaction fees. The data business produces subscription revenue that doesn't care whether markets are up or down.
The risk is that the Big Three exchanges can adjust faster than TMX expects. Nasdaq and NYSE have scale advantages that let them undercut on price or bundle services in ways a 3% player cannot easily match. Cboe, the third leg of the oligopoly, has been quietly building out its own low-cost execution platforms. If MEMX's fee advantage narrows, TMX owns an expensive market-share position with no obvious moat.
The SEC may also place conditions on a foreign entity owning a significant piece of U.S. market infrastructure. The regulatory approval process for exchange ownership has gotten stricter since MEMX launched, and TMX will need to demonstrate that its ownership doesn't create conflicts with Canadian regulatory obligations or cross-border data flows.
The hedge nobody asked for
The cleanest read on this deal is that TMX is hedging against a Canadian market it no longer believes will grow fast enough to justify its valuation. Resource-heavy economies don't produce the kind of SaaS and biotech IPOs that drive exchange revenue growth. The Venture Exchange is world-class for mining juniors, but mining juniors don't scale into the Magnificent Seven.
TMX looked at its home market and decided the ceiling was too low. The $800 million bet on MEMX is what happens when an exchange operator stops waiting for the domestic market to diversify and starts buying exposure to someone else's.
John Odermatt founded MEMX in 2019 with a simple pitch: the big three U.S. exchanges had gotten too expensive and too slow to innovate. Five years later, Odermatt's upstart holds roughly 3% of U.S. equities volume and a seat at the table with Nasdaq and the NYSE. Now TMX Group Ltd., which operates the TSX and TSX Venture Exchange, is paying $800 million for the majority of it.
The price tag alone tells you something about where Toronto's priorities are shifting. TMX has spent the last decade watching Canada's IPO pipeline dry up every time commodity prices slide and watching Bay Street fail to land the tech unicorns that list in New York instead. The MEMX acquisition, expected to close in 2026 pending SEC approval, is the clearest signal yet that TMX has decided the path forward isn't fixing Toronto. It's buying into somebody else's growth market.
The concentration bet nobody wants to call by name
Canadian equity markets have a problem that polite people call "sector concentration." The blunt version: too many banks, too many miners, not enough of everything else. As of early 2026, financials and energy still account for roughly half of TSX market cap. When oil drops or credit tightens, the whole index moves together. TMX collects listing fees and trading commissions on all of it, which means the exchange operator's revenue correlates uncomfortably with a handful of cyclical sectors.
MEMX doesn't solve that problem, but it sidesteps it. The U.S. equities market is 20 times the size of Canada's, and while the Big Three exchanges still control the bulk of volume, the fragmentation creates room for a fourth or fifth player willing to compete on price. MEMX launched as the low-fee disruptor, targeting broker-dealers and high-frequency traders tired of paying Nasdaq's data fees. It worked well enough that TMX is now paying a premium for a 3% market share most people would call marginal.
The math makes sense if you squint. A 3% slice of U.S. equities volume generates more revenue than a dominant position in a smaller, slower-growing market. TMX is trading Canadian market share it already owns for American market share it can grow into. The risk is execution. Integrating a U.S. exchange while managing VettaFi, the $1.1 billion data and indexing firm TMX acquired in 2023, is not the same as running the TSX on autopilot.
What TMX is actually buying
The MEMX deal isn't about trading volume. It's about the data underneath it. By controlling the exchange, TMX gains the right to package and sell proprietary market feeds to the same algorithmic traders and institutional desks that generate the volume in the first place. Non-trading revenue now accounts for more than half of TMX's total revenue as of 2025, and the MEMX data feeds slot directly into that capital-light model.
This is the same playbook TMX used with VettaFi. Buy the infrastructure that generates data, then sell that data back to the market at margin. The TSX listings business produces transaction fees. The data business produces subscription revenue that doesn't care whether markets are up or down.
The risk is that the Big Three exchanges can adjust faster than TMX expects. Nasdaq and NYSE have scale advantages that let them undercut on price or bundle services in ways a 3% player cannot easily match. Cboe, the third leg of the oligopoly, has been quietly building out its own low-cost execution platforms. If MEMX's fee advantage narrows, TMX owns an expensive market-share position with no obvious moat.
The SEC may also place conditions on a foreign entity owning a significant piece of U.S. market infrastructure. The regulatory approval process for exchange ownership has gotten stricter since MEMX launched, and TMX will need to demonstrate that its ownership doesn't create conflicts with Canadian regulatory obligations or cross-border data flows.
The hedge nobody asked for
The cleanest read on this deal is that TMX is hedging against a Canadian market it no longer believes will grow fast enough to justify its valuation. Resource-heavy economies don't produce the kind of SaaS and biotech IPOs that drive exchange revenue growth. The Venture Exchange is world-class for mining juniors, but mining juniors don't scale into the Magnificent Seven.
TMX looked at its home market and decided the ceiling was too low. The $800 million bet on MEMX is what happens when an exchange operator stops waiting for the domestic market to diversify and starts buying exposure to someone else's.
Read Next
How Dual Citizens Can Claim RESP Tax Benefits Without Form 3520 Reporting
Bond Markets Are Pricing In Recovery, Not the 1970s Replay Already Underway
Why Fortress Tells Private Credit Lenders to Stop Chasing AI Data Centre Deals
Canada's Tax Code Punishes Work and Rewards Wealth Hoarding: Four Reforms That Would Actually Fix It