Canva Raises $200 Million at $40 Billion Valuation

Canva Achieves $40 Billion Valuation with New Funding

Following a recent $200 million (USD) investment round spearheaded by T. Rowe Price, Canva’s valuation has surged to $40 billion. Both new and current investors contributed to this funding, including prominent firms like Franklin Templeton, Sequoia Capital Global Equities, and Bessemer Venture Partners.

A Rising Star in the Tech Industry

This investment round firmly establishes Canva as a leading private software company. It also significantly boosts the profile of the Australian technology sector as a whole.

From Humble Beginnings to Global Success

The company’s journey began in 2012 when co-founder and CEO Melanie Perkins, alongside her team, initiated the development of Canva. The product officially launched in 2013. While the core concept was straightforward, the underlying technology proved to be quite complex.

Democratizing Design

Canva empowers individuals to create a wide range of designs, including presentations, apparel, marketing materials, and more. The platform achieves this through an intuitive drag-and-drop interface, complemented by a vast library of templates. Users can easily customize designs without requiring extensive technical expertise.

Furthermore, Canva provides access to a comprehensive collection of resources, encompassing fonts, templates, images, GIFs, and videos.

Focusing on Accessibility and Collaboration

The company’s strategy of targeting a broad audience, rather than solely professional designers, has been remarkably successful. Design professionals frequently utilize Canva to assemble elements created in specialized software like Figma and Sketch.

However, Canva does not aim to directly compete with these dedicated design tools.

Streamlining Design Workflows for Teams

Perkins illustrated this point with the example of business cards. Designers can craft individual card components using their preferred software, then assemble the final layout within Canva. This template can then be shared across an organization, allowing employees to independently update their information and generate new cards as needed.

Prioritizing Collaboration Over Advanced Features

When questioned by TechCrunch regarding potential expansion into professional designer workflows, Perkins emphasized Canva’s focus on collaboration. “We would like to replace PDF,” she stated, envisioning a future where designers share editable templates rather than static files.

She added that excelling in areas like vector design is less critical, as specialized programs already address those needs.

An Early Adopter of the Bottoms-Up Enterprise Model

Canva pioneered a “bottoms-up” enterprise approach, initially offering a free product and subsequently introducing paid enterprise features. This strategy has proven highly effective.

Impressive User Growth and Revenue Projections

Currently, Canva boasts over 60 million monthly active users across 190 countries. Major corporations, including Salesforce, Marriott International, PayPal, and American Airlines, utilize the platform’s enterprise solutions.

The company anticipates exceeding $1 billion in annualized revenue by the close of 2021, with more than 500,000 teams subscribing to paid plans.

Investing in Future Growth

With a team of 2,000 employees, Canva intends to utilize the new funding to double its workforce within the next year.

Commitment to Diversity and Inclusion

Canva has publicly shared its diversity statistics, revealing that women comprise 42% of its workforce. However, the company has not yet released data regarding representation of people of color.

The Power of a Generous Free Product

Perkins highlighted the importance of a highly valuable free product in driving the company’s growth. “We intentionally make our free product extremely generous,” she explained. This approach fosters product adoption, encourages sharing, and fuels viral growth.

Expanding Product Capabilities

In addition to team expansion, Canva plans to enhance its product offerings. Upcoming features include a website design tool, allowing users to convert designs into functional websites with domain registration capabilities. A new video editor and offline mode are also in development.

A Dual Mission: Value and Impact

Perkins articulated Canva’s two core objectives: becoming one of the world’s most valuable companies and maximizing its positive impact on society. These goals are mutually reinforcing.

Giving Back to the Community

The company actively supports social causes through initiatives like the 1% Pledge. It also provides its premium product to over 130,000 nonprofits, dedicates over 45,000 volunteer hours annually, and participates in the Print One, Plant One project, which plants a tree for every print order.

A Significant Philanthropic Commitment

Founders Perkins and Cliff Obrecht are committing approximately 30% of their equity in the company to philanthropic endeavors through the Canva Foundation.

Looking Ahead

Perkins will be participating in an upcoming event to discuss the new funding, valuation, future plans for Canva, and her perspectives on the evolving landscape of design.