Australia’s Canva expands A.I.-powered design business to Europe

on Jun8
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Melanie Perkins, co-founder & chief executive of Australian graphic design firm Canva, says the business is in a “uniquely strong position” as it expands to Europe.

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LONDON — Australian graphic design company Canva believes it is in a “uniquely strong position” to withstand industry headwinds as it embarks on a European expansion.

The Sydney-based software company opened its new Europe headquarters in London last month as it competes with tech heavyweights Adobe and Microsoft to attract individual and enterprise users to its design suite.

It comes as higher borrowing costs and a weakening economic outlook have prompted tech firms to slash jobs over the past year. But co-founder and CEO Melanie Perkins said the nine-year-old company is well-placed amid wider pressures.

“Being profitable for the last six years, having a strong cash balance, all of those things have been extraordinarily important,” Perkins told CNBC.

Canva, which offers both free and paid tools for designing websites, presentations and social content, had annualized revenues of $1.5 billion in the year to May. It also has $700 million in cash reserves, the company said.

Of its 135 million global users, 16% are in Europe. Overall, around 15% are paid subscribers, of which 14 million are individuals and 6 million are businesses such as WPP, Unilever and Rolls Royce. It is now targeting growth in both those areas.

“We’ve made our paid products extremely affordable, so regardless of what’s happening in the macroeconomic environment, people are moving to Canva rather than away,” Perkins said of the service.

“We’ve certainly seen that happen and play out over the last couple of years as that economic uncertainty has kicked in,” she added.

Betting on ‘magic’ AI

Canva’s new suite of artificial intelligence-powered editing tools include Magic Edit, which allows images to be replaced with AI-generated alternatives.

Canva

Tech experts have increasingly been raising alarm bells about the threats AI poses to society, with Tesla CEO Elon Much and Sam Altman, CEO of ChatGPT-maker OpenAI, among those to voice concerns.

Canva has partnered with OpenAI for its Magic Write tool, which auto-generates full bodies of text for presentations and blogposts based on prompts of a few words. But Perkins said the company is moving ahead cautiously, “over-indexing towards trust and safety.”

“There’s a lot of terms you can’t do in Magic Write. There’s no medical, no political, there’s a lot of categories that we’ve actually said it’s too risky at this point in time. We’re erring on the side of caution because this industry is so in its infancy,” she said.

An evolving creative industry

The creative industry is among those thought to be at risk of disruption by forthcoming tech advancements, with some platforms already capable of producing images and content previously produced by designers.

Still, Perkins said the tools are intended to streamline and simplify design processes, which she believes will “supercharge” what people can do.

“Every industry goes through radical transformations. Certainly, our industry’s not been distant from that,” Perkins said. “As new technology becomes available, the whole industry has to adapt and everyone has to learn new skills. I think that’s just happened time and time again.”

She founded a $1 billion start-up by 30. Now she's taking on the tech giants


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