Design software startup Canva has been making news of late. The company just raised $200 million at a $40 billion valuation, and co-founders Melanie Perkins and Cliff Obrecht gave the vast majority of their equity (around $13 billion) to charity through the Canva Foundation.
We sat down with Perkins at TechCrunch Disrupt 2021 to talk about how she has approached fundraising, what she’s looking for in a potential acquisition, how she’s managed to grow Canva’s free and paid user base at a rapid clip, and what it actually means to be a “mission-driven company.”
The conversation kicked off with Perkins charitable donation. She clarified that her and Obrecht’s $13 billion-ish give-back was the vast majority of their equity in the company, around 30%. This is a relatively big chunk of equity for growth-stage founders who have raised so many rounds, but Perkins explained how the company has tackled fundraising with a focus on preserving equity.
With early-stage startups, it was very common that you had to raise a 20% to 25% round. We’ve had a very different approach. We’ve raised in the early stages. We couldn’t really be that selective about investors. But investors were very selective about who actually believed in our vision. So it worked out well. But in the time since, we’ve done many rounds. Now, we do a much smaller round at the next value inflection point.
We know, or we hope, that Canva is going to continue to grow rapidly in the right direction. So the valuation today is obviously going to be much smaller than the valuation over the years to come. Rather than taking like a 15% to 25% hit in one single round, which means that you can only do a few rounds over the course of a company’s lifetime, we’ve done much smaller incremental rounds. This has meant that, because we knew that we were wanting to build a big company, we didn’t overcapitalize or overdilute in the early stages. And so we’ve done many, many rounds, that are much smaller amounts, comparative to the size of the round.