Canva - The magic you know the story you don't

Canva - The canvas to endless possibilities of Creativity

Canva is nothing sort of magic for non-designers. It gives us non-designers a superhero feeling, possessing some unearned superpowers.

I am sure like me, there are Millions who love Canva as their most favorite product.

I use Canva in creating almost all my digital work/documents starting from LinkedIn posts to Product decks to PPTs.

Creating all these alluring designs using Canva is as easy as making Maggi but building Canva was not this easy for its founders.

The story of Canva founders building Canva is nothing sort of a blockbuster movie. Here it goes -

Canva - The Blockbuster Movie

Blood, Sweat, and Tears -

Two Teenagers pitch 100+ VCs with no success. Instead, they bootstrapped the startup to millions in profits until the VCs came calling. The crazy part? Today the company is worth over $15BN and they have full control.

You've used the app, but you don't know the story.

At only 19, Melanie Perkins (Co-founder of Canva) was teaching graphic design as a side job during college. She was frustrated by how many complex programs you had to use. She dreamed of simple software to make graphic design easier. To start, she built it for a use case she knew well: yearbooks.

She and her boyfriend, Cliff Obrecht, invested everything they saved plus a small loan to build out the software. The co-founders launched Fusion Books in early 2007 out of her mom's house in Perth. They kept their jobs and invested heavily into a school expo in Sydney.

They spent $1000s on the tickets and booth, but there were more exhibitors than attendees. It was a total waste. They had built a product people enjoyed but hadn't cracked the code on growing it.

The Breakthrough -

Eventually, they picked up the phone and just called the schools direct. They even offered to send over a few samples. It worked! Cliff began calling schools every night, while Melanie and her mom kept the printers running 24/7.

Soon the company became so successful, Melanie dropped out in her last semester to keep it afloat! She wanted to scale beyond yearbooks, but had didn't know-how. Fusion Books came in 2nd at the WA Inventor of the Year competition in 2008. But still needed capital.

As runner-ups, they were invited back the next year for the awards dinner. Bill Tai, VC superstar, and an avid kite surfer, had flown in to speak and grab some air time after. He was the first investor they'd met. They got his card, and an offer to meet if ever in SF.

Melanie emailed Bill several times asking for a Skype chat but got no response. Last ditch, she sent one that said she was coming into town in a few months. He responded that he could meet! Panic set in. Melanie booked her flight and started working on a pitch deck.

Crashing on her brother's couch (he was studying in SF) - Perkins was mortified when she realized how overdressed she was for her meeting with Bill. It was 2010, and she had brought a printed pitch deck when he expected one via iPhone or tablet. She had neither.

Bill had been on his phone the entire meeting. Melanie thought he had been bored. In reality, he was sending intros for her the whole time! She was on to something, but Bill wouldn't invest without a top-notch tech team. It was a classic Catch-22.

What was supposed to be 2 weeks on her brother's couch quickly became 3 months. In 2010, Fusion Books grew to $2MM a year with 50% margins. Funding was still years away.

In 2011, Perkins and Obrecht met their tech co-founder in Cameron Adams, a former Google lead designer. It took another dozen of pitches and over a year before he left his team to join them instead.

Tech team secured, Fusion Books pitched 100+ VCs. Everyone liked the idea and team but turned them down. They needed a better name. One that featured the market opportunity instead of yearbooks. Enter - Canvas Chef.

The Rise of a Decacorn -

Everyone hated Canvas Chef as a name, but it took a new team member to recommend Canva - Canvas in French. The renamed team returned to Bill. He offered to open their round with $25k. Melanie wrangled him up to 100k.

Canva raised a total of $3MM for her seed round in 2012. $1.5MM from investors with a match from the Australian government to keep them from moving stateside. Now it was time to take on Microsoft, Adobe, Google, and Apple.

Building in stealth mode, a bad review broke months ahead of their launch schedule. The follow on reviews were good, but it was clear they needed better onboarding. By using gamification, they were able to build a workflow that taught and entertained new users.

Canva had reinvented the design landscape with their drag n drop interface as Fusion Books years ago, but it didn't make waves until the general use application years later in 2013 They reached 50,000 users in their first month.

Not even 2 years in, they reached over 1MM users and 3MM designs per month in October of 2014.

Their Design School Blog amplified the amazing product growth even further. Following in the footsteps of fellow Aussie startup titan, Atlassian, Canva built an inbound engine of SEO and content that continues to produce compounding returns.

The Happy Ending (or just the start) -

Canva is now worth over $40 BILLION after a fresh funding round of $200 Mn. The new funding dramatically increases the value of Canva’s founders’ stakes in the business, previously valued at a $15 billion valuations in April.

As per Forbes, Perkins, and Obrecht each own about 18% of Canva and Adams 9%. At a $40 billion valuation, that means Perkins and Obrecht each hold stakes valued at $6.5 billion, while Adams’ stake is valued at $3.2 billion. Their new goal is to reach 3.2 billion users. In the process, becoming the #1 design tool for every use.

Long profitable and cash-flow positive, Canva continues to more than double in sales, the company says, on pace to reach a $1 billion annualized revenue run-rate by December 2021, the “vast majority” of that recurring subscription revenue. “Moving in the right direction,” co-founder and CEO Melanie Perkins says matter-of-factly.

Melanie and Cliff got married in Jan 2021 with a $30 engagement ring. The CEO/COO power couple has pledged to donate their entire fortune. Step #2 in a 2 part plan.

For a long term, we’ve had a simple two step plan :

1. Build one of the world’s most valuable companies.

2. Figure out how we can have the most positive impact in the world, and of course, do it!

They’re very much in sync with Step 2 by keeping most of their offerings free. The majority of their users create designs using Canva for free. Even their Premium version Canva Pro too has a Zero pricing policy for NGOs and K-12 teachers and their students.

With the fresh round of funding, Perkins and Obrecht are now pledging to give away 30% of Canva — the “vast majority” of their stakes — to the Canva Foundation to be used for charitable causes. “If the whole thing was about building wealth that would be the most uninspiring thing I could possibly imagine,” Perkins tells Forbes. “It has felt strange when people refer to us as ‘billionaires’ as it has never felt like our money, we’ve always felt that we’re purely custodians of it,” she added in a blog post.

I personally wish they achieve all their dreams and I’m thankful to them for creating such an amazing product.

Sources: Jesse Pujji (@jspujji)’s Twitter thread on Canva.

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This wraps up today’s article.

About Author - Hey, This is Ankit. I am an early adopter of new products. I’ve tested more than 1000 online platforms/apps/products to date. My key skills include observation, which helps me testing every single detail (even a minor one) in a product.

I write about Product features and the scope of improvement from a User's perspective. Along with that, I also write about new Product/start-up ideas.

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