Speaking to The Australian Financial Review, Blackbird Ventures partner Rick Baker would not comment on the fund’s intentions, but said it is impressed by Canva’s progress.
“The company has seen strong growth this quarter with monthly active users increasing by more than 20 million following the launch of the new Visual Worksuite, and [it]has been profitable for six years with a substantial cash balance,” he said.
“These are great signals and clearly the market is recognising that too.
“While the broader market conditions will lag behind the progress of any particular start-up, generational companies continue marching forward and Canva is truly a generational company.“
Canva, which was launched in Sydney in 2013 by Melanie Perkins, Cliff Obrecht and Cameron Adams and operates an online graphic design platform, is one of the most successful Australian technology companies ever.
The company was a regular on the capital raising circuit and for years investors became accustomed to its valuation typically doubling, or more, each round.
In late 2019 the company was valued at $US3.2 billion, by mid-2020 its valuation had soared to $US6 billion and in April 2021 Blackbird Ventures, Scott Farquhar and Kim Jackson’s Skip Capital, T Rowe Price and Dragoneer cut cheques for the business valuing it at a $US15 billion.
Fast-forward to September 2021, and it achieved a peak valuation of $US40 billion.
But, the past year has been a very different story, with Canva opting not to raise any additional capital (something it could easily do with plenty of the cash from its previous capital raises unspent), while investors globally knocked off billions from its valuations amid a significant downturn in tech valuations globally.
Canva co-founder Cameron Adams, who has been expanding his own portfolio of start-up investments, said it was too early to know how 2023 would pan out.
“I think from this year, everyone has really clearly understood that it’s hard to predict what will happen,” he said.
“Heading into 2023, everyone I know is preparing for the unknown. To do that, you need a bit of security.
“You need to step back the risk profile slightly, and aiming for profitability if running a business … because that gives you certainty that you can control your own destiny.”
In July, Canva’s biggest local backers, Blackbird Ventures, AirTree Ventures and Square Peg Capital, joined forces in writing down their stakes by 36 per cent.
AirTree reassesses the valuation of its material holdings every six months, meaning its position in Canva will be reviewed at the end of 2022.
“We don’t comment on specific company valuations, but we can say that we are bullish about Canva’s ability to grow well beyond its last round valuation,” AirTree partner Craig Blair said.
While Franklin Templeton has now marked up its valuation for Canva, the fact that it is still down 60 per cent in a year speaks to the level of uncertainty in the market and enduring nature of the correction.
The Franklin Templeton Growth fund spent $US43.3 million when it acquired the shares in Canva last September, but marked down the value of its stake in the March and June quarters of 2023 to as little as $US14.2 million – a 67 per cent drop. As of September 30, it is now valued at $US17.3 million ($25.8 million).
