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Saturday, November 26, 2022

Startup Unicorn: From Mom’s Living Room to $40B Valuation

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If you visited Canva CEO Melanie Perkins in 2007, the road to unicorn status would have seemed rocky at best.

  • She worked out of her mother’s living room in Perth, Australia — about as far from Silicon Valley as it gets
  • Her product was designed specifically for high school yearbooks — about as niche as it gets

This week Canva raised $200m valuing the company at $40B, making it one of the world’s most valuable startups, per Forbes.

Perkins started with an insight

She realized the process to design and print a poster or flyer took way more tools than it should, and set out to build an all-in-one solution that anyone could use.

She tested her idea with yearbooks, and after finding product-market fit, started courting VCs…

… but was promptly shut down by 100+ investors

After finally scoring a $3m seed round (that was matched by the Australian government), Canva launched in 2013.

Three factors helped the team take off from the start:

  1. Timing: Businesses began using Instagram and Twitter to reach customers, and suddenly needed tools to level up their design
  2. Price: Canva launched with a freemium model, allowing most users to get started quickly at no cost
  3. Ease of use: Canva focused on building a template library (now with 800k+ templates) to make users’ lives easier

Today, Canva is being used to create 120 designs every second…

… and forcing Adobe to protect its throne. The design powerhouse launched Adobe Spark in 2016, which offers a similar template-driven approach with a freemium model.

Canva expects to use the new round to double headcount and possibly fuel acquisitions. The company is already profitable and has no plans to IPO.

Perkins also plans to give away most of her shares to charity because, in her words: “If the whole thing was about building wealth, that would be the most uninspiring thing I could possibly imagine.”

Now that’s one heck of a yearbook quote.

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