Graphic design startup Canva has joined the ranks of Atlassian, becoming Australia’s next tech unicorn after closing a $US40 million ($50.9 million) capital raise that officially values the company at $US1 billion.
The funds were raised in a round led by Australian venture capital firm Blackbird Ventures and joined by Sequoia Capital and Felicis Ventures. It marks the fourth time the company has raised venture capital and brings its total amount raised to more than $US 80 million ($101 million).
The money will be going towards more further expansion, primarily in the company’s 250-strong work base, which the startup is aiming to double. The startup has over 10 million users, according to its website.
Co-founder Melanie Perkins says the raise as a great vote of confidence for Canva and its mission, but says it’s important to not let valuations “become a goal unto itself”.
“As a team, we’re all very focused on delivering value to our users and making their lives easier and better. But each raise is an opportunity to pause and reflect on how far we’ve come,” she told StartupSmart.
Perkins says the startup’s raises early on were significantly different to the more recent raises, with Canva’s first round involving a year of meeting investors, 100 revisions to their pitch deck, and six months on the ground in Silicon Valley. It took “incredible willpower” to complete, she says.
“This time around, things were very different — we’re very happy to have support from Blackbird Ventures, Felicis Ventures and Sequoia China. These funds will help expand our international growth efforts and continue expanding our core product to give everyone across the globe design superpowers,” Perkins says.
And the Canva team hasn’t ruled out future raises, saying the goal is to “create one of the most valuable companies in the world”.
Raises peak early for 2018
Blackbird Ventures co-founder Rick Baker told StartupSmart his VC firm had been investing in Canva at every opportunity as he believes the company is “absolutely” one of the fastest growing software companies in the world right now. Blackbird worked closely with the Canva founders to lead the recent round.
He says Canva could have raised a lot more, but being cash flow positive, the goal was to raise enough to provide the company with a “war chest” of funds to use to start rolling out future plans.
The $50 million raise outranks the vast majority of startup funding rounds completed last year and sets a significant precedent for just nine days into the new year. But Baker says Canva is a “rare case” with a significant reputation and metrics to support it, which only a small number of Australian companies boast, he says.
He says the raise is less about investor confidence and more about the quality of companies coming through from the Australian market, with Canva being one of the first of a wave that started building five to six years ago.
“Venture capital is a business that depends entirely on how many great companies that are coming through the system. There’s a handful coming through at the moment that I hope we’ll see head Canva’s way,” he says.
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“It’s great to see Australian startups get to that level.”
A comparison to Australia’s other prominent tech unicorn Atlassian is an easy one to make, and an accurate one says Baker, who believes the companies growth profiles are at similar stages.
“If you look at [Canva and Atlassian’s] growth profiles in the early years they’re similar. Canva’s is actually ahead of Atlassian’s, but it was a different space when Atlassian was young,” he says.
“The challenge for Canva now is to continue compounding that growth and become a global company on the same scale as Atlassian.”
Baker hails Canva’s massive $US1 billion valuation as a great achievement and hopes to see many more Australian companies reach the fabled ‘unicorn’ milestone, saying we could see “two or three” a year.
“Whether that happens this year, or next year, or even the year after that, it’s hard to say,” he says.
Investor at Blue Sky VC Atlanta Daniel agrees, telling StartupSmart more Aussie unicorns are on the way as our markets continue to emerge and grow.
“I think as the Australian startup and venture markets begin to mature, we’ll see more unicorns emerge, as we have done with Canva and Aconex already in 2018,” she said.
“This is a sign that we’ve got great talent in Australia and great investors willing to back that talent.”