Canva expands to europe

Australia-based graphic design company Canva has expanded is operations in Europe and set up headquarters in London. While it offers AI-based tools, the company’s CEO Melanie Perkins sounds wary of generative AI.

Perkins said Canva is in a “uniquely strong position” despite the continued headwinds and challenges in the tech industry.

Canva offers AI-based tools for creating websites and social media content and is among the beneficiaries of the current AI wave.

Its annualized revenue run rate was at $1.5 billion in the first five months of the year and unlike many other tech startups, it is posting profits. It also holds $700 million cash on its balance sheet which provides a cushion amid the current slowdown in venture capital (VC) funding.

Global VC funding incidentally fell 44% in May. The funding slowdown impacted startups across the value chain including seed-stage, early-stage, and late-stage companies with the funding down between 41%-48%.

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

Canva's valuation has fallen

That said, Canva has also been impacted by the ongoing valuation slump in startup companies and earlier this week T. Rowe Price marked down its investment in Canva by 67%.

Canva Expands to Europe Amid AI Boom

Canva is meanwhile optimistic about its expansion in Europe. “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,” said Perkins.

Canva is available in 100 languages across 190 countries and boasts of around 135 million users of which around 15% are paid subscribers.

It said that a sixth of its users are from Europe. According to SimilarWeb, just over 16.1% of Canva’s users are based in the US while Brazil comes second with 8.62%. Mexico, Philippines, and India respectively account for 7.39%, 5.67%, and 4.0% of its users.

Canva users by country
Based on Similar Web data

 

Canva has also partnered with ChatGPT’s parent company OpenAI for the Magic Write tool. The tool helps generate full texts for blogs and presentations when prompted with a few relevant words. Perkins meanwhile said that the company is going slow on the product.

She said, “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.”

AI Regulations is a Work in Progress

To be sure, Perkins is not the only tech leader who’s worried about AI. Elon Musk has labeled AI as “dangerous” and has been lobbying for AI regulations.

OpenAI CEO Sam Altman is also “scared” about AI and fears that it might “go quite wrong.” Last month, Altman testified before the Senate where lawmakers grilled him about risks associated with AI.

Calls for labeling and regulating generative AI have risen across the developed world amid multiple fake viral videos. For instance, last month fake images of a blast near the Pentagon went viral.


Earlier this month, European Commission deputy head Vera Jourova said that companies deploying generative AI tools like ChatGPT should label AI-generated content to help curb rising instances of fake news using AI tools.

Europe incidentally is at the forefront when it comes to drafting AI regulations and last month European Union lawmakers voted to incorporate tougher amendments to the region’s widely anticipated AI Act which could be the first comprehensive AI regulation globally.

UK’s Competition and Markets Authority has also launched an initial review of AI models.

Meanwhile, despite strong growth and profitable operations, Canva is non-committal about the IPO timing with Perkins saying “there’s nothing to speak of at this point” about the listing.

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