Sobering markdown: Canva slashes valuation by $10b as AI reality bites

Canva, the Sydney-based design platform, has significantly reduced its internal valuation, marking a sharp decline of more than $10 billion from its previous estimate. According to an internal assessment shared with employees, the company's current value stands at $43.9 billion, a drop of nearly a fifth. This adjustment comes amid growing concerns about the impact of artificial intelligence on the company's core business. The revised valuation was disclosed to staff ahead of upcoming share grant pricing, which will determine how many stock options employees receive this year. Blackbird Ventures, one of Canva’s major backers, has also adjusted its valuation of the company, reducing it to $34.9 billion, approximately $10 billion less than the $42 billion figure set during a share sale last year. These updates were communicated to Blackbird’s investors on Friday. The new figures reflect a broader shift in investor sentiment toward companies facing challenges from AI-driven competition. The 409A valuation, used to calculate employee share prices, is typically lower than what external investors might pay, as it adheres to U.S. tax regulations that limit the liquidity of employee-held shares. The decision to slash the valuation follows a period of declining performance and shifting market dynamics. Canva’s projected revenue growth for the current year has been trimmed to 20 percent, down from an initial forecast of 30 percent. In 2025, the company saw a 38 percent increase in revenue, while the prior year recorded a 45 percent rise. However, these gains have slowed, raising questions about the sustainability of its growth trajectory. Monthly active users dipped below 208 million in early August, remaining flat compared to the same period the previous year. Canva attributes this slight decline to seasonal factors, including the summer break in the Northern Hemisphere and the concentration of its user base in educational institutions. The downward trend in valuation is influenced by both internal performance and broader market conditions. Canva acknowledged that the reassessment was driven by evolving market realities, even if its financial results had not worsened significantly. Blackbird partner Rick Baker stated that the firm’s reevaluation was based on Canva’s latest financial reports and forward-looking projections. He emphasized that the valuation process adhered to standard practices, using independent appraisals conducted on a mark-to-market basis. Canva faces mounting pressure from the rapid advancement of AI technologies, which threaten to disrupt its primary functions. With tools capable of generating posters, pitch decks, and other design elements through simple prompts, the company’s traditional offerings appear increasingly vulnerable. This challenge mirrors the struggles faced by other tech firms, such as Adobe, which has seen its stock fall by around 23 percent over the past year, and HubSpot, which has dropped approximately 45 percent. Similarly, Figma, another design platform that recently went public, has lost about 68 percent of its value since its listing. In response to these pressures, Canva has positioned itself as an AI-first company, emphasizing its investment in artificial intelligence. The firm has acquired several AI startups and developed its own design models, claiming it has managed to reduce the cost of delivering AI-powered services by 90 percent. Co-founder and Chief Operating Officer Cliff Obrecht defended the company’s strategy, stating that Canva was built with a long-term vision. He argued that maintaining a private status allows the company greater flexibility to pursue ambitious projects without the constraints of quarterly earnings expectations. Obrecht noted that the company has navigated fluctuating market conditions throughout its history, adapting to changes in investor sentiment and technological advancements. He expressed confidence in Canva’s ability to leverage AI effectively, asserting that the company’s approach will enable scalable solutions with sound economic fundamentals. Blackbird’s Rick Baker echoed this sentiment, supporting Canva’s strategic direction and expressing belief in its capacity to achieve meaningful progress in the AI space.