Many years ago, creating fancy business cards, flyers, invitations and youtube
thumbnails was painful unless you were a master designer with excellent computer skills.
It was tricky to make anything professional looking. That was until Melanie Perkins,
alongside her boyfriend Cliff Obrecht and Cameron Adams launched Canva. After hearing
the word no from over 100 investors across the globe, Perkins got lucky while kitesurfing with
some Venture Capitalists who invited her to a pitch in Perth. Fast forward 10 years and the
Australian born business now sees 40 million users a month spanning 193 countries and has
a valuation of $40billion as of September. But what is Canva, how does Canva make money and how
has it grown to become one of Australia’s most well known businesses. Here’s How It Happened.
What is Canva? Canva is a free graphic design platform that lets you create business cards,
flyers, tickets, newsletters, restaurant menus,
zoom backgrounds and logos among many other things. It offers a Freemium service,
where users can create for free, but must pay for more complicated edits and add ons.
It has a drag and drop interface and designs can be customised quickly and easily, helping
beginners to bring their ideas to life. Their goal is to get into every workplace across the globe
but that might leave you asking yourself how does Canva make money? Well they upsell their premium
version which is about $10 per month and offers better features, stock photos, cloud storage,
background removal, Premium templates and branding capabilities. Through Canva enterprise,
they target America’s Fortune 500 companies to sell them design and editing tools.
Now that we know what Canva is and how it makes it’s money,
let’s look back at the story of How Canva was founded.
The story begins in 2007 with Melanie Perkins at the University of Western Australia where she
taught her fellow students how to use programs like Photoshop whilst studying for her Commerce
and Communications degree, with some people needing an entire semester to learn where all
the various buttons were. The lack of easy to use design software led to Perkins and her boyfriend,
Cliff Obrecht to develop their own site which was originally for school yearbook
designs called Fusion Books. It was a website that allowed students to collaborate and design
their own yearbooks online which they would then print and deliver to the schools across
Australia setting up their first office in Perkins’ mums living room. This niche
approach helped the pair to understand whether or not their idea was needed
and whether or not it was possible to achieve. The answer was yes to both,
with the business growing and expanding internationally to New Zealand and even France.
But the big break came in 2010 when Perkins met the investor Bill Tai opportunistically when he
came to Perth to judge a startup competition who invited her to San Francisco to pitch her idea
and connect her to his contacts. But the curveball was that Tai was a keen Kitesurfer which meant the
invitation to his MaiTai retreat for investors and kitesurfing enthusiasts thrust Perkins and Obrecht
into an opportunistic pitch with investors. They pitched their idea, which at the time was
called Canvas Chef, a pizza if you will, with all the toppings and ingredients like fonts,
photos and illustrations to design anything. That name didn’t last long however and when one of the
engineers explained that canvas was pronounced Canva in French, there was no turning back .
Having never kitesurfed before, Perkins said she decided to give it a go because she didn’t
have many connections or a network so you just kind of have to wedge your foot in the door
and wiggle it all the way through. But this is a skill that all businesspeople must learn,
and it helped to secure further investment needed to hire their growing team of tech
engineers after years of pitching without any funding.
By 2012, with the help of their tech advisor, Lars Rasmussen, the co-founder of Google Maps,
the pair were introduced to Cameron Adams, the third Co-Founder. That same year,
they closed their first funding round which was oversubscribed at $1.5mn of outside investment
which was then matched by the Australian government to keep them in their homeland.
In 2013, the site went live allowing people to design online for free to officially
begin competing with microsoft and adobe. It was perfect timing as businesses were
changing their design plans thanks to the popularity of instagram and Twitter
as everyone improved their online presence. In the first few months, they had 50,000 signups
and by 2014 they’d raised another $3mn from Peter Thiel’s founders fund as they hit 600,000 users.
Just a few years later and Canva had significantly increased revenues. In 2017, revenues were at
$23.5mn, but the company was still making a loss of about $3mn as they were truly
in growth mode. By 2019, revenues hit $200mn and the funding round the year valued them at $3.2bn.
As of today, Canva is worth $40 billion after they raised $200mn from the likes of T Rowe Price,
Franklin Templeton & Sequoia Capital in the run up to their IPO later next year.
It’s impressive growth, but it has come with it’s difficulties. For example, until a few years ago,
the editing tool was so clunky that only 5 engineers could work on it at any one time. Things
were breaking constantly. They were hacked with 139mn users data revealed which encouraged them to
setup 2 factor authentication. Their most pressing issue however is that they are yet to truly master
their corporate sales with small, rogue teams using Canva rather than whole companies. And
with competitors like Adobe, Microsoft, Figma and Sketch, the market is not exactly empty.
But Perkins “feels like we’ve done an incredible job, but we’ve done very little
compared to what we want to do. We’ve done 1% of what I think is possible. “Our company
mission is to empower the world to design. And we really mean the whole world.” 85%
of Fortune 500 companies are using the platform with between $700mn to $1bn in revenues,
that success has sparked a $40bn IPO which is on the horizon.
Most importantly, Perkins and Canva have solved the problem of shockingly tricky design tools,
making it simple and free for anyone with an internet connection.
Their brand values intentionally communicate a sense of openness to show that anyone can bring
their ideas to reality. We want everyone to be able to enjoy the superpowers of being able to
design - it’s wonderfully human, empowering, and inspiring. And that’s how it happened.
Thanks for watching!