Deal focus: VCs fuel Canva’s growth designs

Though the internet began as a completely text-based medium, its users have always found ways to add visual flair – first with emoticons made from letters and symbols, more recently with specialized characters that have found their way into every messaging and social media app.

“People’s use of emoji to communicate feelings or emotions is one example of how people can communicate better graphically than with text,” says Niki Scevak, a managing director at Blackbird Ventures. “People have underestimated that and how many walks of life it bleeds into.”

That insight has fueled the growth of Canva, the Australian design-focused start-up that just raised a $40 million funding round led by Sequoia Capital China, with participation from existing investors Blackbird and Felicis Ventures.

Canva’s cloud-based platform and mobile app are aimed at providing design tools on a software-as-a-service (SaaS) basis to users that want to create and customize their online presence. It targets customers that need to build a visually distinct space for their company or brand, but struggle to master traditional graphic software such as Adobe Photoshop and InDesign. Users can edit photos, add diagrams and graphs to their page, and design logos and posters.

Launched in 2012 (founders Melanie Perkins, Cliff Obrecht and Cameron Adams are pictured), Canva reported last year that it had attained 294,000 paying customers and reached profitability. The company’s newly enlarged war chest will fuel its global expansion plans, including a doubling of its staff to 500 employees by the end of the year. 

This scale is built on a strong reputation among customers for quality service and reliability. The loyalty thus gained is as much an asset to the company as its technology offering or its leadership team.

“There’s such a great opportunity: because of this passionate user base that religiously uses Canva, the company can go in a number of different directions because it’s earned that right with the user base,” says Scevak. “It can move into a lot of different markets and address many different use-cases and workflows.”

Canva’s newest investment is also noteworthy for propelling the company to a valuation of $1 billion, making it one of Australia’s biggest technology successes.

Blackbird sees the success of Canva and other Australian late-stage technology firms as part of a rising trend stemming from the support of the government. Peers like Atlassian also play a role: the Sydney-founded enterprise software company went public at a valuation of $4.3 billion in  2016 and its founders have since become active supporters of Australia’ s technology ecosystem.

“There’s a wave of companies that started five years ago that are starting to ripen,” Scevak says. “That explosion has created a universe of start-ups that are reaching this stage of traction, and Canva is leading the charge on that front.”   

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• Topics
• Australasia
• Expansion
• Technology
• Australia
• Growth capital
• Venture
• Sequoia Capital
• Blackbird Ventures
• TMT