‘Pretty astounding’: Canva puts the foot down as it eyes Wall Street

Australian design software maker Canva has ticked over $2.5 billion in annual revenue and says it has added 1000 new employees in the last year alone, as it moves to further shore up support from investors and Wall Street ahead of a blockbuster public listing.

Amid the ongoing “tech wreck” of the past two years that has torn through company valuations and forced lay-offs across the sector, Sydney-based Canva has continued to grow. The company says it has added 115 million users in the past two years alone, and has now surpassed 200 million monthly active users globally.

Canva head of product Robert Kawalsky says his company now has 5000 employees.Credit: Louie Douvis

Analysts and investors have questioned whether Canva over the longer term can truly compete with the likes of US design heavyweight Adobe, which is worth about $330 billion and commands 70 per cent of the creative software market, but Canva executives say its propulsive growth in both users and staff headcount speaks for itself.

“The momentum continues to be pretty astounding,” Canva’s head of product Robert Kawalsky said in an interview.

“It’s a really significant milestone, to now have 200 million monthly users, and revenue is tracking strongly as well.

“We’re at 5000 people now. But I think what we’re focused on in this environment right now is profitability. We’ve hired about 1000 people this year, and we’re still hiring across various roles and various campuses, so we’re growing that global footprint but trying to be as thoughtful as possible about each role.”

Leonardo.AI CEO JJ Fiasson with Canva co-founders Cliff Obrecht and Melanie Perkins.

Canva has spent the past year positioning itself as a key player in the generative AI arms race and says its AI tools have now been used over 10 billion times to date. In August, it acquired Australia’s most-hyped generative AI start-up, Leonardo.ai, for a reported $320 million, its largest acquisition to date.

Leonardo.ai executives say their content-generating system Phoenix, which uses text instructions to generate AI photos within seconds, delivers superior image quality and can produce realistic pictures of hands and fingers, which competitors such as Midjourney still struggle with.

It’s a transaction that should help boost Australia’s relevance in generative AI technologies. It’s also a deal that Leonardo.ai co-founder Jachin Bhasme said was negotiated over a beer, between Leonardo.ai co-founder JJ Fiasson and billionaire Canva co-founder Cliff Obrecht.

“At the time we were gearing up for our Series B [capital] raise, and we wanted to expand and build out our AI research function. It was not long after we’d released Phoenix, and to get the call from Cliff, for him and JJ to grab a beer, was definitely surprising,” Bhasme said.

Leonardo.ai co-founder Jachin Bhasme.

“When the offer came through, JJ brought it back to us, and we were all really excited about the idea. [...] There was just a really solid alignment of values and goals, and ultimately, for what we wanted to do, it made a lot of sense.”

Three months after the acquisition, Canva is launching “Dream Lab”. Accessible from the Canva homepage, users can enter a simple text description and Leonardo’s Phoenix model will generate dynamic photos or graphics.

Bhasme said that Leonardo is allowed to still operate as it had been previously, as a separate independent entity within Canva, and would be retaining its brand and its strategy. He said no staff had departed as a result of the acquisition.

Canva is also on Wednesday launching a slew of new features including AI-powered whiteboards, automatically generated captions for videos and advanced animation effects.

The company may have won over 200 million users with its easy-to-use design software, now widely used in social media and educational settings, but its next battleground is in the high-margin enterprise market.

Canva commands just 4 per cent share of the creative software market, compared to its much larger rival Adobe, which holds more than 70 per cent.

That’s a process that will be crucial ahead of a mooted IPO, likely on the tech-heavy Nasdaq, but one Kawalsky said will take some time.

“Canva is being used by 95 per cent of the Fortune 500, but it’s often being used by individual teams to get work done. It’s happening in pockets, across different areas of the business,” he said.

“There’s this journey that we need to go on with IT administrators and in the C-suite about how to take all that passionate usage and turn it into enterprise level plans that makes sense for them and meets all their needs.”

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