Canva Strikes Biggest Acquisition Yet in Chase to Take on Adobe

26 Mar 2024

Yahoo Finance

(Bloomberg) -- Canva Inc. acquired the Affinity suite of creative software popular with Mac users, securing its biggest acquisition to date in an effort to compete with Adobe Inc.

Most Read from Bloomberg

Trump Vows to Pay Fraud Trial Bond Cut by 68% to $175 Million

Trump’s Net Worth Hits $6.5 Billion, Making Him One of World’s 500 Richest People

After Exposing Realtors, Eliminate the Mortgage Interest Deduction

Boeing CEO to Step Down in Overhaul Sparked by Safety Crisis

The deal, which is a mix of cash and stock, is valued at “several hundred million pounds,” Canva co-founder and Chief Operating Officer Cliff Obrecht said in an interview with Bloomberg on Monday. It’s the biggest outlay yet by Australia’s most valuable startup, priced at $26 billion in its latest share sale, and marks a milestone in the expansion of its range of professional tools.

Joining Canva is the entire 90-person team of Nottingham, UK-based Serif, the startup responsible for Affinity’s portfolio of photo-editing, publishing and illustration software. Affinity’s apps have been featured in Apple Inc.’s presentations of creative products and are the “final piece in our jigsaw,” Obrecht said. They will now be used to complement Canva’s selection of artificial intelligence-powered tools as the Australian firm bolsters its offering of online workspaces.

Read More: Canva Unveils AI Design Tools as Competition From Adobe Heats Up

Founded about a decade ago, Canva has grown into the most capable competitor to Adobe, the longtime dominant provider of software for graphics professionals. Adobe has added AI features throughout its products recently, but its shares have fallen more than 15% this year after a $20 billion deal to acquire Figma fell through in December.

Investors have long viewed Canva as a candidate to go public, though the company hasn’t discussed plans for doing so. It recently completed a $1.5 billion secondary share sale, Obrecht said.

The startup, which has focused on making easy-to-use products targeted at people without formal design training, surpassed $2.1 billion in annualized revenue and has over 175 million users. It added over 90 million new users over the past 18 months, helped by new AI features.

The Australian upstart has now acquired a total of seven companies in Europe, including visual AI startup Kaleido.ai and image providers Pexels and Pixabay, as it looks to expand its presence on the continent.

“It’s a market that has such high potential and opportunity,” said Obrecht, adding that Canva set up its European headquarters in London last year. “We really want to double down on that organic growth.”

(Updates with comments from Canva COO)