The Australian design platform Canva has achieved something that only a few companies manage: less than ten years after its founding, it is – as of today – in use with a good 60 million users in more than 190 countries around the world, making it a real heavyweight in the design market. This also pleases investors, who just a few days ago injected fresh money into the company for the second time in six months. It is now valued at $40 billion, more than double what it was in April. What does Canva intend to do with the cash injection, and why does it also have an impact on online print shops?
Canva first received a financial injection of $71 million in April, followed in mid-September by a second round of capital increases led by T. Rowe Price, which raised a further $200 million. In other words, a lot of money. But with an alleged 400,000 new users per week, does the template and design specialist really need so much outside capital? There has been speculation – and not just for six months – that the company is preparing its IPO, so a high valuation is naturally helpful. Moreover, the goals are ambitious: By the end of the year, Canva intends to crack the revenue mark of one billion US dollars, which would mean a multiple of 40 times in the end. In addition, the number of employees worldwide is to be doubled from the current 2,000 in the course of the next year.
With all the sales reports and annual growth rates, which Canva, by the way, most recently put at 130 percent, the company’s profits are presumably less lavish. After all, the original business model has a downside: With a good 500,000 paying customers, only a small portion of the community uses paid pro or corporate accounts; the majority are still free accounts. It’s no wonder that Canva has taken the process a step further and has discovered the output of design files in printed form. The print service “Canva Print” was launched in Germany at the end of 2017, but it wasn’t until this year that development really took off.
As part of the Print Partnership Program, the Australian design editor is currently being implemented in more and more European online print shops: Helloprint, PrintoClock and Exaprint Spain are already involved, as well as Tradeprint, Pressup, wheretheprintbuys – and since late July, Flyeralarm. The Würzburg-based online print shop is even Canva’s exclusive partner in Germany and plans to expand the collaboration even further in the future, for example by extending it to other product categories. “It is quite realistic that we will become the largest print partner for Canva in Europe in the medium term,” said Business Unit Manager Sandra Veenhof at the end of July.
Will that succeed? As zipcon has learned, Canva has cancelled its print partners – who after all pay 5,000 euros per month plus a share of the order value for the editor license and API – just a few weeks ago. Why? At the moment, we can only speculate. But there are indications that should make online printers – and not just them – sit up and take notice.
Canva has been busy “shopping around” in recent months and, for example with the Austrian start-up Kaleido AI, has positioned itself even more comprehensively in terms of performance and has appointed a new head, Barry Newstead, for the “Ecosystem and Lead Print” area since August.
When it comes to printing, the Australians have also brought new know-how on board, with a partnership with Kornit. The Israeli manufacturer of textile printing machines, in turn, took over the software specialist Custom Gateway about a year ago and launched KornitX, an order platform for individual textile products. Will such an acquisition be enough for Kornit to drive its own digital transformation? That’s another matter. After all, Custom Gateway’s software is established and has proven itself.
Canva, on the other hand, was still exclusively associated with Gelato until the summer. Now the company has switched to Kornit and Custom Gateway. This leads to the assumption that in the future KornitX will not only sell textile printing products, but that Canva will massively expand its product range, especially in the area of marketing and mass personalization, thus turning the textile printing platform into a commercial printing platform. At least this is the thesis of Ludovic Martin, an accomplished observer of the printing industry from France. And I agree with him. In addition to fashion and textiles on demand, the portfolio could also include personalized advertising objects, photo products and other things in the future. In principle, Canva would then cover large parts of all online printing, with the exception of signage and packaging.
So, is Canva going to attack online printers head-on? The more the design platform develops and grows in the direction of commercial printing, the more the company itself becomes competition for online printers, who are currently integrating Canva’s design editor into their own stores in increasing numbers.
The competition, much like the Trojan horse, could grow from within. The current paradigm of the customer going to their printer’s store, creating their design in the Canva editor and having it printed there will give way to the customer designing first on Canva and then, in the best-case scenario, choosing where to have the product printed. In doing so, however, Canva relegates printers to the end of the buying process. They would be mere vicarious agents, with no real added value and virtually no differentiators – because let’s face it: apart from the price, there’s hardly anything left in this situation to set them apart from the competition. The print shop would then just be a subcontractor and an anonymous retailer. Does this sound familiar to you? No wonder, after all, Amazon basically does it in exactly the same way.