Canva Embraces AI to Boost Valuation, Says Co-founder
Updated: Dec 30, 2023
[Edited] Canva, the Australian design software maker, is turning to artificial intelligence (AI) to regain its valuation and attract enterprise clients.
With mounting competition and a sharp decline in valuation, Canva is incorporating AI-powered features into its design software to stay ahead in the market.
Co-founder and Chief Product Officer, Cameron Adams, believes that AI tools allow users to experiment with new ideas more freely and quickly, eliminating the constraints of time, resources, and money that hindered such trials in the past.
Adams emphasizes the importance of software companies like Canva embedding AI in their offerings without increasing prices, as users always have the option to seek alternatives.
Adams states, "I think there is a real opportunity cost in organizations and individuals not keeping up with the latest technologies." He founded Canva in 2012 alongside Melanie Perkins and Cliff Obrecht. Adams highlights the significant efficiency gains and increased productivity achieved through the use of AI tools. Companies that fail to take advantage of these advancements will soon find themselves falling behind.
Canva recently introduced a range of AI-powered functions to its design software. These features include the ability to transform presentations into executive summaries, generate coherent blog posts from a cluster of ideas, and create photos and videos from a single prompt. These additions follow the launch of several new features in September of last year, including work documents, website design, and background removal in videos.
By incorporating these AI-powered features, Canva aims to attract more enterprise clients and boost its revenue. The company faces fierce competition in the enterprise sector, going head-to-head with industry giant Adobe, as well as startups like Figma and Kittl. Adobe, with its $257 billion market capitalization, also offers AI-powered features such as image generation and a virtual assistant.
Winning new customers is crucial for Canva, as its valuation has experienced a significant decline. In 2021, the company was valued at $40 billion, but it dropped to $26 billion in July 2022. Despite reporting $1.7 billion in revenue and remaining profitable for seven years, Canva's valuation markdowns have been attributed to broader market conditions. Venture capital firms have become more cautious due to tightening credit conditions and a volatile public market.
Adams acknowledges that the industry as a whole has recalibrated, and Canva is not exempt from these market changes. To expand its user base, Canva is targeting markets outside of the U.S. and Australia, with a particular focus on Asia. The company has witnessed a surge in users from Indonesia and India, prompting its expansion plans in the region.
While AI has raised concerns about its impact on human jobs, Adams remains optimistic. He believes that humans will continue to play a significant role in terms of creativity and content creation. Canva has allocated $200 million to compensate contributors who allow the company to use their content for training its AI models. Adams argues that technological innovations like AI open up more opportunities for humans, enabling them to be more productive and think differently.
As Canva embraces AI to enhance its design software and attract enterprise clients, the company is positioning itself to regain its valuation and compete in the rapidly evolving market. With its focus on AI-powered features and expansion into new markets, Canva aims to solidify its position as a leading design software provider.
Canva incorporates AI-powered features into its design software to attract enterprise clients and regain its valuation.
Co-founder Cameron Adams emphasizes the importance of keeping up with the latest technologies to avoid opportunity costs.
Canva faces competition from Adobe and startups like Figma and Kittl in the enterprise sector.
The company's valuation has declined from $40 billion to $26 billion, despite reporting significant revenue and profitability.
Canva aims to expand its user base in Asia and remains optimistic about the role of humans in creativity and content creation.
Source: Nikkei Asia