Canva has established a remarkably successful business model grounded in the belief that graphic design should be accessible to everyone. Since its inception in 2012, the Australian company has raised $560 million and currently generates approximately $1.7 billion in annual recurring revenue, according to co-founder and Chief Product Officer Cameron Adams.
Operating in 190 countries and available in over 100 languages, Canva boasts more than 170 million active users. However, despite its impressive growth trajectory, the company has faced challenges this year. Several of its investors, including Blackbird, T. Rowe Price, and Franklin Templeton, have reduced their valuations of the company, which soared to $40 billion following a $200 million fundraising round in 2021. In June, Blackbird's valuation plummeted to $25.6 billion while T. Rowe Price's estimate fell to around $13 billion.
While it might be tempting to view these devaluations as warranted, they're mainly reflective of changing market sentiment. After a significant expansion in multiples during 2020 and 2021, a contraction forced investors to reassess their positions. Nevertheless, Canva still stands as a decacorn by all relevant measures.
Adams expressed confidence amid the valuation adjustments, stating, “This year has been one of our best for growth. We’ve nearly doubled most of our metrics, adding 80 million more active users since last year. We focus on increasing our user base, enhancing our product, and driving revenue growth.”
Over the past year, Canva has introduced a range of generative AI features, enabling both the company and its users to create designs and functionalities previously unimaginable. “For us, AI will elevate human creativity,” Adams noted, emphasizing that AI will allow Canva to deliver exceptional visual communication on a global scale.
Since ChatGPT revolutionized the consumer-facing AI landscape in November 2022, many companies have rushed to adopt generative AI, often met with skepticism. However, Canva's approach to generative AI is notably different. It forms a fundamental component of their strategy to enhance user growth and revenue. Content remains the backbone of Canva's success, facilitating remarkable expansion across global markets by providing tailored images and templates that resonate with specific local audiences.
“One of the keys to our growth has been our international perspective,” Adams stated. With over 120 million assets in its library, sourced from individual creators and stock photography agencies, Canva emphasizes localized, authentic content.
“We prioritize creating diverse, culturally relevant content,” Adams explained. This involves not only offering tools in various languages but also presenting templates that resonate with local holidays, cultural issues, and relatable imagery. This commitment to genuine local experiences has driven Canva's impressive international growth.
Adams identified the U.S. as Canva's top market, with Brazil and India closely trailing. Indonesia and the Philippines rank among the company’s fastest-growing markets.
Generative AI will enhance the breadth and intelligence of content options available to users. In October, Canva announced a commitment of $200 million over the next three years to compensate creators for allowing their content to train the company’s AI models. So far, only a minimal fraction—0.0005%—of creators have opted out.
“We’re proud to advance ethical AI that considers creator rights,” Adams said. “We firmly believe that combining human talent with technology yields the best results.”
Increased visual content production is just one aspect of Canva's evolving offerings. The company has integrated various tools—such as a copywriting assistant and video generators—to expand its focus toward business-to-business services.
In September 2022, Canva unveiled its Visual Suite, which encompasses a range of tools from whiteboards to marketing materials designed for businesses. “This reflects the growing tendency of large organizations to adopt Canva for multiple applications,” Adams noted.
Canva has observed a surge in large teams utilizing the platform to develop everything from branding strategies to presentations. “In the last year, we’ve welcomed about 2 million new teams to Canva, highlighting our increased penetration into enterprise settings,” Adams indicated. Impressively, over 90% of Fortune 500 companies leverage Canva, with AI and large-team collaboration representing core focuses for the coming year.
AI has become an integral part of Canva’s ecosystem, with the launch of Magic Studio—an all-in-one AI design platform. One notable feature, Magic Switch, allows users to convert one type of design, such as a presentation, into another format, like a blog post, complete with a new layout and rewritten content.
“You can transform a presentation into a blog post, and it understands the core ideas while adapting the content for readability,” Adams explained. Such innovative tools are part of the newly announced Magic Studio suite, which positions AI at the heart of the Canva experience.
Canva has rolled out several AI-driven products, including Magic Write, its copywriting assistant, and Magic Design, which generates personalized templates based on uploaded images. Having integrated a text-to-image generator and video creation capabilities by October, the combined platform has already attracted an additional 20 million active users.
Adams detailed a three-pronged strategy for AI development: first, building powerful internal AI models for functionalities like background removal and photo editing; second, partnering with industry leaders such as OpenAI and Google Cloud; and third, fostering a vibrant ecosystem for external developers. The inaugural developer conference hosted by Canva in June introduced a software development kit, enhanced APIs, and a $50 million fund to support app developers.
“Thanks to this investment, we’re witnessing a surge of integrations from both software and AI developers,” Adams stated. “Innovations like AI presenters in videos and AI-driven music generation are among the exciting developments, with over 60 app developers already launching successful integrations on our platform.”
As both the world and Canva navigate the evolving landscape of AI interaction, Adams explained, “We are early in understanding how users will engage with AI products. By launching new features now, we can collaborate with our users to find the best applications, gathering insights daily to refine and improve the technology.”
Looking ahead, Adams confirmed that Canva’s AI developments are guided not by a desire to attract investor funding or pursue public markets. The company prioritizes profitability, having maintained this philosophy since its founding. “We don’t view going public as beneficial at this point,” he said. “Having a substantial reserve of untapped funds and our profitable status mean we can focus on our core mission without the pressure of raising more capital.”
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