Graphic design is one of those SMB functions that’s been democratized. That’s been a slow progression of digital tools like Adobe Illustrator, in-design and the rest of the Creative Cloud. Canva has come along in the past few years to double down on that democratization principle.
It’s done this with a web-based approach and a set of tools that lower adoption barriers another few rungs when it comes to drag & drop functionality for building SMB marketing assets and overall design work. It operates at SMB levels of competency and savvy to create pro graphics.
All of this is amplified in the Covid era. SMB cost-saving measures may push them into the arms of leaner tools like Canva. And the web-based approach is conducive to social distancing (versus commissioning a designer). Some SMBs also may have more idle time to reboot their marketing.
In fact, The company has seen a 50 percent uptick in shared designs, as reported by TechCrunch, and 25 percent growth in designs created each month (including non-SMBs). Overall, the business is growing 100 percent annually (revenue and users) with 30 million active users in 190 countries.
Integrations & Expansions
With all of that in mind, two items jumped out at us in the last week which signal Canva’s market growth and future positioning. The first is its latest funding round. It raised $60 million from General Catalyst, Sequoia Capital China and others, bringing its post-money valuation to $6 billion.
It notably turned down some money in the oversubscribed funding round, citing its confidence in the product and aversion to dilute its ownership. So it took the prudent but sometimes-rare approach of taking less than what was offered but enough to achieve its near term goals for business growth.
Speaking of which, Canva will use the funding for further product expansion. Recent launches include video editing tools that align with Canva’s signature drag & drop appeal. It also launched Canva for Education which has tools for teachers and young students to get started with graphic design.
Canva will also use the funding for hiring, acquisitions, business development and product integrations. For example, it recently launched a developer platform for startups to build plugins that integrate with Canva design workflows, including Dropbox, Google Drive and Instagram.
And that brings us to the second Canva-related item from the last week. It has partnered with FedEx for “design-to-print” functionality that lets users pick up Canva-generated print designs at FedEx Office locations. This is a good example of the types of collaborations we’ll continue to see from Canva.
U.S. Foothold
The FedEx direct integration is also on-brand, as it lets Canva users start print orders right within their existing workflows, without going to a separate app or site. Prints can then be picked up at any of FedEx Office’s 2000 U.S. locations, which notably also gives the Sydney-based Canva a better U.S. presence.
This also comes at a fitting time, as the act of getting things printed is a bit challenged in the current locked-down environment. Those who rely on printers at their place of work are underequipped if working remotely. So reducing friction for getting anything printed these days should resonate well.
The FedEx partnership will also expose Canva to a new audience, as its tools are now more readily available to existing FedEx Office customers. Currently, that seems somewhat limited but it could expand and is a good branding play at the very least, in terms of getting incremental U.S. exposure.
Canva continues to make well-devised moves like this, which we expect to continue. As a bit of a darling in the SMB SaaS universe, Canva is worth watching. We’ll do just that and keep an eye on the company’s ongoing moves, growth, and U.S. foothold. We’ll report back what we see.
