Australian digital design startup Canva just closed a new round of funding that minted the company as one of the most valuable startups in the world. The $200 million raise accomplished two things:
1) The private company's new valuation is now $40 billion. The new valuation is more than double the previous valuation that was achieved just five months ago. Canva is now the most valuable startup in Australia.
2) Husband and wife co-founders Melanie Perkins and Cliff Obrecht are now each worth $6.5 billion. Perkins and Obrecht each own about 18% of Canva. A third founder, Cameron Adams, owns 9% of the company.
What is Canva?
Canva is a graphic design platform where users can create graphics for social media, posters, presentations, and other content. It is the brainchild of Melanie Perkins. Perkins already had success with a design tool for high school yearbooks called Fusion Books. She created Fusion Books when she was 19 years old. Over the first five years of business, Fusion Books grew to become the largest yearbook company in Australia, eventually expanding into New Zealand and France.
Canva was founded by Perkins, Obrecht, and Cameron Adams in 2012.
During its first year of business, Canva had more than 750,000 users. In 2015, the company launched Canva for Work, to give businesses an easy platform for creating marketing materials.
Canva allows users to design everything from resumes to GIFs to social media posts to resumes, business cards, logos, and other graphic elements. Canva supports video, presentations, and live collaboration. Perkins' goal is to have resumes evolve away from PDFs or Word or Google docs and into custom web designs showcasing the users' job experience. Canva's competitors today include Adobe and Vistaprint. If Perkins has her way, Canva will also take on Squarespace and Wix. Canva reports that more than seven billion designs have been created in Canva since it launched and 120 new designs are created each and every second of the day.
Today Canva has more than 60 million monthly users and more than 500,000 paying subscriptions from companies including Zoom, American Airlines, Intel, and Live Nation.
Canva has had several funding rounds, including $40 million raised in early 2018 which valued the company at more than $1 billion. In May 2019, Canva raised another $70 million at a $2.5 billion valuation. In October 2019, the company raised $85 million at a $3.2 billion valuation. Canva did not have any problems raising money during the coronavirus pandemic, as is evidenced by its $60 million funding round in 2020 and its recent $200 million funding round.
Canva's profits have been surging and the company projects it is on pace to hit $1 billion in annual sales in 2021 thanks to its robust recurring subscription revenue. The recent funding round will fund hiring more employees (the company currently employs 2,000, up from 950 in 2020) and possibly acquisitions.
Giving Their Wealth Away
Perkins and Obrecht have pledged to give the "vast majority" of their stakes in Canva to the Canva Foundation to be used for charitable causes. In an interview with Forbes, Perkins said:
"If the whole thing was about building wealth that would be the most uninspiring thing I could possibly imagine."
She elaborated on that thought in a blog post, saying:
"It has felt strange when people refer to us as 'billionaires' as it has never felt like our money, we've always felt that we're purely custodians of it."