Online design and publishing platform Canva has become the first Australian start-up since Atlassian to join the elite ranks of Silicon Valley unicorns with a valuation in excess of $US1 billion ($1.28 billion).
The valuation is based on a $US40 million series A funding round. It is the sixth funding round since the company was founded 4½ years ago by Melanie Perkins, Cliff Obrecht and Cameron Adams.
The latest funding won the support of one of Silicon Valley’s top five venture capitalists, Sequoia Capital, which was an early investor in Apple, Google, WhatsApp, Cisco, Oracle, Yahoo and LinkedIn.
Canva chief executive Ms Perkins said the money raised from existing and new shareholders would be used to expand the company’s range of online design and publishing products.
“We are in 190 countries, in 100 languages and we have done about 1 per cent of what is possible,” she told The Australian Financial Review in an interview at the company’s Sydney head office in inner-city Surry Hills.
“I know we have a $US1 billion valuation but we like to say we are a baby unicorn,” Ms Perkins said. “There is a lot more to do before we are grown up.”
When asked about her ambition for Canva, Ms Perkins did not hesitate before saying: “I think we can make Canva the most valuable tech company in the world.”
To achieve that ambition Canva will have to expand its market value about 900 times to beat the $US890 billion valuation of Apple, the world’s largest company.
That goal sounds outrageous considering Canva lost $3.3 million in the year to June 2017.
But Rick Baker, a partner of Canva shareholder Blackbird Ventures, said Canva is possibly one of the fastest-growing software companies of all time measured in terms of percentage growth in recurring revenue.
The company earns revenue from a subscription model.
“Canva is making huge strides in democratising design for everyone,” he said. “Its product growth and adoption across many demographics is truly exceptional.”
Mr Baker first met Ms Perkins and Mr Obrecht in 2010 before they had launched Canva.
“I convinced them to delay their first seed funding round until after Blackbird Ventures was established,” he said.
“Our first investment as a venture capital firm was the $250,000 we invested in Canva.”
Lots of smart money has backed the Canva business, including Australian entrepreneurs Paul Bassat from SEEK and Daniel Petre from AirTree Ventures.
The company has attracted a lot of attention in Silicon Valley.
Early investors were Google Maps founder Lars Rasmussen, legendary venture capitalist Bill Tai, former Yahoo CFO Ken Goldman and Hollywood actors Owen Wilson and Woody Harrelson.
Several Silicon Valley venture capital firms apart from Sequoia have backed Canva including Felicis Ventures, Vayner Capital, Matrix Partners and Shasta Ventures.
Ms Perkins admitted that Canva’s two major competitors were design software companies Adobe and Microsoft.
But she said Canva was built on breaking down the silos and complexity that are part and parcel of using the products sold by Adobe and Microsoft.
“The world is rapidly becoming more visual, yet traditional design tools in the market are too complicated to use, or so costly that they become inaccessible,” Ms Perkins said.
“Canva is designed to enable individual and teams to collaborate seamlessly, and our growing footprint is evidence of the widespread need that we are addressing.
“This additional funding will bring us one step closer to giving everyone the ability to thrive in an increasingly visual environment.”
Canva’s growth rates in terms of customer usage of its platform have been staggering.
After eight months of existence about 350,000 designs were being created each month. After 20 months of existence about 3 million designs were created each month.
Today, after 52 months in operation, Canva’s platform is handling about 34 million designs a month.
The idea for Canva had its roots in the lounge room of Ms Perkins’s family home in the northern Perth suburb of Duncraig. She and Mr Obrecht started a printing company called Fusion Books, which printed school yearbooks.
Cameron Adams, a former Google engineer, joined the company as a co-founder before its first round of seed funding in 2013.
Since then the company has raised $US81 million.
Atlassian became a unicorn well before it listed on the NASDAQ stock exchange with a valuation of $US6 billion in 2015. Its market valuation is now $US11.9 billion.