Global Courant
Melanie Perkins, co-founder and CEO of Australian graphic design firm Canva, says the company is in a “uniquely strong position” as it expands into Europe.
David Fitzgerald | Sports File | Getty Images
LONDON — Australian graphic design company Canva believes it is in a “uniquely strong position” to withstand industry headwinds as it embarks on a European expansion.
The Sydney-based software company opened its new European headquarters in London last month as it competes with tech heavyweights Adobe And Microsoft to attract individual and business users to its design suite.
It’s because higher borrowing costs and a weakening economic outlook have prompted tech companies to cut jobs over the past year. But co-founder and CEO Melanie Perkins said the nine-year-old company is well positioned amid broader pressure.
“Being profitable for the past six years, having a strong cash balance, all of those things have been extremely important,” Perkins told CNBC.
Canva, which offers both free and paid tools for website design, presentations and social content, had annual sales of $1.5 billion in the year to May. It also has $700 million in cash reserves, the company said.
Of the 135 million users worldwide, 16% are in Europe. In total, about 15% are paying subscribers, of which 14 million are individuals and 6 million are businesses like WPP, Unilever and Rolls Royce. It is now focusing on growth in both areas.
“We’ve made our paid products extremely affordable, so no matter what happens in the macroeconomic environment, people are moving to Canva instead of leaving,” Perkins said of the service.
“We’ve definitely seen that happen and play out in recent years when that economic uncertainty kicked in,” she added.
Betting on ‘magical’ AI
Canvas, a 2023 CNBC Disruptor, however, has not been immune to industry setbacks.
Despite reaching a peak valuation of $40 billion in 2021, the privately held company has since seen investors lower their valuations amid the dark outlook. It’s scary too implications avoided in the collapse of start-up financier Silicon Valley Bank in March.
Meanwhile, the growing focus on artificial intelligence coincides with the company’s rollout of a new suite of AI-powered editing, publishing and design features, which attracted 10 million new users in a month. Amidst the fanfare surrounding the nascent technology, it has preferred to euphemistically call the tools “magic.”
“That term ‘magic’ is what we’ve been referring to for almost a decade, and so branding is something we’ve been pushing through,” Perkins said.
Canva’s new suite of AI-powered editing tools includes Magic Edit, which can replace images with AI-generated alternatives.
Canvas
Tech experts are increasingly sounding alarm bells about the threats AI poses to society, including Tesla CEO Elon Much and Sam Altman, CEO of ChatGPT maker OpenAI, who voiced their concerns.
Canva has teamed up with OpenAI for its Magic Write tool, which automatically generates full text for presentations and blog posts based on prompts of a few words. But Perkins said the company is proceeding with caution, “over-indexing toward trust and security.”
“There are a lot of terms you can’t use in Magic Write. There aren’t medical ones, there aren’t political ones, there are a lot of categories that we’ve said are too risky at this point. We’re erring on the side of caution because this industry is still in its infancy,” she said.
A developing creative industry
The creative industries are one of the sectors believed to be at risk of being disrupted by upcoming technological advancements, with some platforms already capable of producing images and content previously created by designers.
Still, Perkins said the tools are meant to streamline and simplify design processes, which she says will “supercharge” what people can do.
“Every industry is going through radical transformations. Our industry is certainly not far from that,” said Perkins. “As new technology becomes available, the whole industry has to adapt and everyone has to learn new skills. I think that’s happened time and time again.”
“When we launched Canva, people were like ‘oh, is this going to be the end of graphic design’ and it certainly hasn’t been. I think we’ve seen a much wider spread and demand for graphic design and visual communications across all organizations, she added.
As the company approaches its 10th anniversary in August, it hopes continued adoption can fuel their ambitions to amass 1 billion users and become one of the world’s most valuable companies.
Asked if that user target could happen within the next decade, Perkins said she was hopeful. She was less willing, however, at the prospect of a possible IPO. “There’s nothing to talk about at the moment,” she said.
