Canva hits $US40bn valuation

Canva has become the world’s most valuable private software company after completing a $US200 million capital raising and its Perth-raised founders have pledged their stake for social good.

Melanie Perkins and Cliff Obrecht said today they would commit the vast majority of their 30 per cent equity stake to do good in the world.

Their fast-growing company is valued at $US40 billion ($A55 billion), based on the pricing of the latest capital raising.

That values the founders’ stake – they are both business partners and a married couple – at $US12 billion ($A16.5 billion).

In the company’s first-ever media briefing, they gave a detailed insight into the extraordinary growth they have achieved since the graphic design software business commenced in 2013.

Using some lessons from their first business, Perth-based Fusion Books, Canva’s goal is to simplify and ‘democratise’ design.

Revenue has been doubling year-on-year – it is currently tracking at an annualised rate of $US700 million and expected to exceed $US1 billion by the end of the year.

The Sydney-based company has doubled staff in the past year to 2,000 and expects to double staff again next year.

The majority are based in Australia (1,200) and the Philippines (600).

The company has more than 60 million monthly active users in 190 countries.

This includes 4.5 million paying customers, including a growing number of businesses.

It has recently had a record quarter, with 100 million designs completed using its software.

Chief financial officer Damien Singh indicated the company was in a strong financial position.

It has been generating positive free cash flow since 2017 and still has all the funds it has raised since 2015, though Mr Singh did not specify how much that was.

Mr Obrecht said the company proceeded with its latest capital raising so it could accelerate growth, be more flexible, hire the best talent and undertake more acquisitions.

He added Canva has no plans for a stockmarket listing on the immediate horizon.

The company was able to raise money and provide liquidity to its investors via the private market and therefore saw no need for a public listing.

The latest $US200 million funding round was led by existing investor T. Rowe Price.

It was joined by new and existing investors including Franklin Templeton, Sequoia Capital Global Equities, Bessemer Venture Partners, Greenoaks Capital, Dragoneer Investments, Blackbird, Felicis, and AirTree Ventures.

The $US40 billion valuation makes Canva the world's most valuable private "software" company though it is outstripped by four other private tech companies - AI company Bytedance, valued at $US140 billion, fintech companies Stripe and Klarna, and Elon Musk's SpaceX.

Ms Perkins and Mr Obrecht have outlined plans to increase their philanthropic giving.

They plan to use The Canva Foundation – a public company established last year with advice from Perth law firm Jackson McDonald and registered with the Australian Charities and Not-for-profits Commission.

Their first pilot project will provide $10 million in direct financial support to people in southern Africa suffering extreme poverty, via the charity GiveDirectly.

Ms Perkins said this was the first step in a very long journey.

“It’s a huge responsibility that weighs really heavily on us,” she said today.

The 30 per cent pledge is on top of a pledge already made by the company, to distribute one per cent of equity, profits, time and products to do social good.

Ms Perkins said 130,000 non-profits already get free access to Canva’s paid products.

The company has also supported the planting of more than two million trees

Ms Perkins said she was pursuing two overarching goals in tandem – creating one of the most valuable companies in the world and doing the most good that we can.

“What is good for business is also good for humanity,” she said.

“We want our team to feel proud and motivated.

“We want our (Canva) community to know their purchasing decisions are positively impacting the world.”