Canva's growing pains
Slashed budgets and sombre meetings as Australia’s largest tech giant enters its “awkward stage”.
Four months ago, Canva co-founders Melanie Perkins, Cliff Obrecht and Cameron Adams were skipping around a stage in Los Angeles proclaiming the design software company was now an artificial intelligence giant after launching a suite of new AI features. The annual conference, known as Canva Create, climaxed with a musical number featuring an orchestra, ballerina, and frenzied line dancers all revelling in a song generated by CanvaAI about the prowess of Canva AI.
But there was no dancing at Canva's all-staff meeting last Tuesday. Instead, Perkins and Obrecht took the unusual step of taking their employees through a recent investor presentation. The pair conceded the company – last valued at $US42 billion ($60 billion) – felt pressured to rush out their AI-features before the economics stacked up and had spent the bulk of the time since burning through cash to keep up with demand for that expensive functionality.
Canva has failed to roll out its full AI suite to all users and missed its revenue forecasts as a result. That’s despite charging more than $US100 a month for its new AI specific tier.
"We felt forced to push it out," Obrecht told staff of the launch of Canva AI 2.0, which tripled the costs of the overall business almost instantly. He added that "[our] numbers are not where we want them to be right now" before Perkins interrupted to say this would all be rectified when their new "freemium flywheel" picks up. She also said the main priority for the business was curtailing the company's AI costs to avoid eating into the $US1 billion in cash on its balance sheet.
