Two of the venture capital funds that helped build Canva into one of the world’s most valuable private technology companies have quietly cut the value they place on their stakes, trimming roughly $10 billion from the Sydney design giant just as it pushes deeper into an expensive artificial intelligence overhaul.
According to reporting by The Australian Financial Review, Blackbird Ventures and Airtree, both foundational investors in the graphic design platform, lowered the carrying value of their Canva holdings in recent fund updates. The downgrades coincided with Canva revising its own internal valuation lower before a fresh issue of shares to employees, a mechanism that lets staff turn paper wealth into cash.
For a company that has become shorthand for Australian start-up success, the markdown is a notable moment. It does not mean Canva is worth less in any operational sense, and secondary share sales in 2024 had valued the business well north of US$30 billion. But the repricing tells you how the people closest to the company are thinking about the near term, and it puts a number on the tension between Canva’s soaring ambitions in AI and the cost of chasing them.
Why valuations are being trimmed
Venture funds carry their unlisted holdings at a value they revisit periodically, and those marks move with market sentiment as much as with a single company’s performance. Right across the sector, the froth of the 2021 boom has drained away. Listed software multiples have compressed, interest rates spent years higher than the cheap-money era that inflated tech valuations, and investors have grown more sceptical of businesses that spend heavily today for growth that may or may not arrive.
Canva sits inside that shift. The company has been reworking its product around generative AI, folding text-to-image tools, writing assistants and automated design features into a platform used by more than 200 million people each month. That transition is not cheap. Serving AI features at scale means renting enormous amounts of computing power, and much of Canva’s user base sits on the free tier, meaning the company shoulders the cost of those features without collecting a subscription in return. FluentSea has previously covered how that dynamic is reshaping the economics of Canva’s free offering.
Set against that backdrop, a markdown from long-term backers reads less as a loss of faith and more as a recalibration. The funds are signalling that the price they would pay today, in a colder market and with heavier near-term spending, is lower than the eye-watering figure the company commanded at its peak.
Two ways to read the move
There are competing interpretations, and both have merit. The optimistic case is that Canva is doing exactly what a mature private company should do. By resetting its internal valuation before issuing shares to employees, it gives staff a realistic price at which to sell, avoids the awkwardness of marks that later prove unsustainable, and keeps its cap table honest. Investors at Blackbird Ventures have long argued that patient capital and disciplined marks are features of a healthy portfolio, not warning signs, and Canva remains one of the fund’s crown jewels.
The more cautious reading is that the AI era is proving as brutal on incumbents as it is enabling. Canva built its empire on making professional design accessible to non-designers. Generative AI now lets anyone produce a passable graphic from a text prompt, which threatens to commoditise the very thing Canva sells while simultaneously forcing the company to spend big to stay ahead. If AI lowers the barrier to entry for rivals and raises Canva’s own cost base, the margin story that underpinned its valuation gets harder to tell. The markdown, on this view, is the market pricing in that uncertainty.
The reality is probably somewhere in between. Canva is still growing, still profitable by its own accounts, and still one of the few Australian technology firms operating at genuine global scale. But the days when its valuation only ever pointed up are clearly over.
What it means for Australia
Canva is not just another portfolio company. It is arguably the most important private technology business the country has produced, and its fortunes ripple far beyond its Surry Hills headquarters. Thousands of Australian employees hold equity in the company, and a lower internal valuation directly affects the price at which they can cash out. For many, that share sale is the difference between paper wealth and a house deposit.
The markdown also matters for the wider venture ecosystem. Blackbird and Airtree are two of the largest and most influential funds in the country, and Canva has been a significant part of their reported returns. Australian superannuation funds and institutional investors are backers of those funds, which means the value assigned to Canva feeds, however indirectly, into the retirement savings of ordinary people. When the marks come down, the paper gains that made local venture capital look so attractive come down with them.
There is a broader mood here too. Prominent local investor Daniel Petre of Airtree has been among those warning that the software boom is entering a more sober phase, a theme FluentSea has explored in coverage of the so-called SaaS reckoning. A repricing of the country’s flagship tech company gives that argument a concrete, headline-grabbing example.
What happens next
The immediate test is the employee share sale itself, which will show how much appetite there is for Canva stock at the new, lower mark. Strong demand would suggest investors still see plenty of upside; a muted response would reinforce the cautious camp.
Beyond that, the question is whether Canva’s AI investment starts to pay for itself. The company needs its generative features to do more than dazzle. They have to convert free users into paying customers, lift the value of existing subscriptions, or open new revenue lines large enough to justify the compute bill. If that happens, today’s markdown will look like a temporary dip in a long climb. If it does not, backers may find themselves revisiting their marks again.
For now, Canva remains a private company on its own timetable, with no listing announced and no obligation to chase quarterly expectations. That freedom is one reason it has been able to invest so aggressively in AI while the market watches from the sidelines. The $10 billion question is whether the bet lands before the patience of even its most loyal backers is tested.
Sources: The Australian Financial Review
