Canva COO Cliff Obrecht on hitting 260M monthly users and nearly $4B revenue — and why their integrated creative OS beats point solutions

I'm doing good. I'm doing good. Can you hear me? All right. Yeah. Yeah, we we can hear you now. Uh John John asked if you were in Australia. Might be a silly question. I am in Australia. Yes. Got it. How you? Yeah, we uh yeah, give give us uh super super excited to have you on the show.

I know I know you have a bunch of uh product updates uh to talk about today, but uh catch us up to speed on the latest at Canva, the shape the shape of the business today, all that good stuff.

Um because uh I feel like every you guys are maybe a bit quieter uh on our corner of the internet, but uh every month or so people realize how much revenue you guys are doing and it's always uh pretty shocking numbers. So we're super excited to chat. Yeah, we're in Sydney, Australia.

We like to be quiet achievers over here. Business has been going well, really well actually. We are about 260 million monthly active users. Um, we'll close the year close to 4 million in revenue. 4 million in revenue. Well, close to close to close to close to profitable company for 8 years now. Uh, growing high 30s.

Um, business business keeps trucking along.

We've got a amazing team building an amazing product for our amazing customers and we just focus on delivering user value and really feel by building the best product possible and delivering as much customer value as possible the good things like the users and the revenue comes quite naturally.

So, we've been um investing hard. Obviously, last couple of years, I think the world shifted under every established technology company with AI. We've had to kind of figure out what does that mean in this new world.

And where we've landed is it's really just reinforced our mission to empower the world to design to create anything, design anything, and publish anywhere. And that's evolved and and now it's easier and better and ever.

and and we're owning more and more of the workflows, helping organizations create onbranded content, on-brand content at scale, helping them deploy, understand how that content is performing once it's deployed and and really facilitating that uh feedback loop.

Um, so yeah, it's been fun fun times in internally like walk us through your kind of thought process around the opportunities or even competitive threats around Gen AI over the last few years cuz from my point of view it feels like Gen AI is is a uh is just an acceler is is like could be extremely meaningful like um accelerant to your guys' business.

It just makes it easier to create cool things uh on your computer. feels very aligned to the core business. But h how have you guys thought about it over time? Did you feel like you were caught off guard or were you experimenting early? Like I'm curious to know what the what the development cycle's been like.

We weren't caught off guard. We kind of knew this was coming and we were working on AI design in a more structured programmatic ML way for like a long time before the the image models came out. the speed at which those image models came out and and got really really good.

That's what kind of shocked us and with new methodologies um that led us to acquiring a company called Leonardo. We really needed to infuse the AI DNA into the company and we really needed to accelerate our sort of roadmap in that area and so we acquired an AI company.

We actually acquired an AI company for background removal about 5 years ago. So we very much knew it was coming. It was just the speed at which it hit and scaled was a bit of a surprise to us. Um we think we caught the wave well. Um it really as you said it's an accelerant for what we can do.

So we create videos, we create social graphics. Um we recently just launched the world's first design model that actually generates layered designs that you can edit. Um and then when things like you're creating a video, we set out the timeline and the storyboards and you can generate AI clips within that.

So you can essentially prompt, create, upload images and actually all the the great video models and whatnot that are coming out now really help our customers achieve their goals better than ever before. So we have kind of two-prong approach.

We work with the world's best models um and world's best AI companies and then where we've got a strategic data advantage and we've got strategic insights like when it comes to design that's where we build our own models and have built our own foundational models. What about on the product side?

Um there's this interesting dynamic in I feel like most design pieces of software where uh they start as discrete applications and they all kind of bleed together like eventually I think like you can technically edit video in Photoshop and you can design a thumbnail for a YouTube video in After Effects and like like the entire Adobe suites kind of bled together where they can all do the same there's like overlapping features and I'm wondering about how you think about creating content with AI.

Is that just something you need to stuff into all the existing applications or do you need a new like a new application that can be like AI first and then maybe you add the features to the other applications but do we do we need like a specific new application for generative AI?

So I feel like this is almost a planted question because this is something we think about a lot. Um and we've actually it wasn't planned for the record. We never prepare for interview. Our audience knows [laughter] we know. Oh yeah. I don't even get any. Normally I get prep questions or something before these things.

We do it live. Yeah. Yeah. Freestyling. Um but yeah. No. So the platform we've built over the last 10 years is actually perfect for AI. So when you think about it, we've built a unified document model.

So whether you're creating a presentation, a social media graphic, uh long form text document, a website, a video, all of these documents have been built off the same engine, right? Simultaneous collaboration and everything across all of them. Then at the found, so that's the dock type.

That's what we call our visual suite. Up the top at the bottom, we have our infrastructure layer. So that is things like our digital asset management system. It's your brand kit. It's it's all the core engine that allows you to share and publish to any platform. Okay. So that's what we had in the middle.

We've put this AI layer. So when you want to create a design, let's say I want to create uh QBR report like a quarterly business review for a customer using this data and their brand. It calls on your data from Salesforce or whatever. It calls on that company's brand kit. It calls on your company's brand kit.

It then understands what you're trying to achieve. It then generates it as a presentation and then allows you to deploy that and understand is it getting clicked through blah blah blah blah blah. So it's actually connected this entire ecosystem that we call the creative operating system.

Um which has sort of all come to fruition and it's really leveraging that prior 10 years of investment to make Canva an incredibly powerful design platform. A lot of the other companies they've built these bespoke products. So they've built a Gen AI image generator. They've built a Gen AI this or that.

They've built a presentation tool or a tool to create vector graphics. At Canva, it's all an integrated Creative OS, which is really I don't know if we planned it that well on purpose, but it's just uh it's kind of we kind of did. It's uh yeah, it's also it's it's nice if you get a little lucky sometimes even.

Where where do you see the uh the the end of the map or the edge of the map of like what you want to do creatively in Canva?

Uh, I'm just thinking about like if you get really really crazy into, you know, media creation, you can wind up in a in a 3D modeling software and like Adobe has Substance and they have that app dimension, but you can go into Houdini or uh, you know, Maxon products like Cinema 4D or Blender.

Uh, and it feels like with the with the AI with the generative AI boom, you might not ever need to actually go that deep down the stack or go into like an After Effects competitor, motion, graphics, video tracking.

Like there's so many things that will that might never be exposed to the user because they're you're building at a time when the abstraction layer is now rising thanks to generative AI.

But how do you think about the long-term functionality like the stuff that's the furthest out on the proumer professional enterprise level creator frontier? Yeah, another really good question. Another I feel like planted question but not planted. Um, so you want to abstract regular users, knowledge workers, etc. , etc.

, from all of that complexity as much as possible. If you want to create a 3D graphic, we just launched a 3D product just last week. So you can now generate with AI 3D products in Canva, edit them, rotate them, do all those things. So um you can do that as a regular knowledge worker with no design experience.

We also 18 months ago acquired a company called Affinity. They are a professional design suite that has a vector graphic tool, a layout tool, and a photo editing tool. We just relaunched that last week as well. That has a million downloads within the first week. So, and it's 100% free for everyone. Yeah, that's awesome.

And so, that's really the craft side. So, if you want to get super detailed as a professional creative and create a logo or a vector graphic or get really down to the pixel manipulation side of things, that's what Affinity is absolutely incredible for. And then it seamlessly integrates to Canva.

So, you can push that vector graphic into Canva for the rest of your knowledge workers to use within the organization. So you can create templates, you can create them in Canva or you can create them in Affinity, push them into Canva and then scale them throughout your organization.

So these two things work hand in hand. Um, and you really want the power of those tools if you want them, but most people that aren't professional designers don't want that power and they don't want the complexity that comes with that foul power. What is sentiment like within the community at Canva around AI broadly?

I'm curious if if certain types of users are much more optimistic and excited about new AI features versus maybe like traditional uh traditional graphic designers, but what what's the general feeling around uh the technology today?

I think people when they wake up in the morning, they don't wake up and say I want to create a social media ad or they don't wake up and say I want to create presentation.

Sometimes I wake up and I think that just to be clear, but [laughter] not not an ad, not but like people people create an ad because they want to grow their business. People create a presentation because they're a startup wanting to land that pitch deck and get investment funding.

So they they they wake up in the morning with a goal. And what we're evolving our business to be is a company that helps people achieve their goals, not just create a design. And AI has accelerated our ability to do that. like a million times. Yeah, that makes sense. You're the COO.

Give me some best practices for acquiring companies post merger integration. What makes it successful? What are you watching out for? What are the pitfalls?

What are the nightmares that you've heard anonymously from your mentors about what can go wrong when a largecaled software company like yours acquires another software company and the integration doesn't go quite right? What are you looking for? So we've acquired 10 companies now about 10 companies um of various scale.

I think it comes down to the founders and I've done my last three acquisitions on the balcony of uh my favorite pub and so honestly like on the balcony. So it's like if this doesn't go down, you're going over in the end one of those guys.

It's like a you're kind of like old Patty down at the pub is going to throw you off break your legs if you don't do the deal. Is that what's going [laughter] on? [gasps] I mean, that's Yeah. Yeah. Kind of. But [laughter] we're not threatening anyone. We're not threatening anyone.

But like, you got to get the cut of the jib of the founder you're acquiring. What are their motivations? Why are they in it? Does 1 plus 1 equal 10?

So the companies that we find best to acquire, they've got an amazing piece of technology, they got an amazing founder, and that founder wants to get the power of what they've built in way more hands than their current distribution channel.

So if we can plug the power of their technology and team into our distribution channel, 1 + 1 equals 10. And you can see if they get a glint in their eyes when you talk about that, uh, and it's that glint in their eyes and just deeply understanding their motivations that is going to make it successful or not successful.

if they're just after a quick exit, that could be fine if you're just after technology or just after their customer base.

But if you don't deeply understand the founder, and that's why I don't have an M&A team, like we do have an M&A team, but we don't have a head of M&A because I feel when you're acquiring companies, it is so deeply personal and the person that's going to sponsor the success of that company once it joins your company needs to be involved in that process.

And they need to they need to be the ones making the decision. And when that's delegated down, I feel that leads to a lot of um carnage. And most of the most of the founders that we've acquired and and some we've acquired like 8 years ago are still with us today and and are in leadership positions in the company.

So I think that's sort of testament to the success of a lot of the acquisitions we've done. It's very cool. What's the uh chat wants to know the biggest fish you've ever caught? [clears throat] Oh yeah, I love fishing [ __ ] Yeah. Um [laughter] Oh, some big ones. Oh, you should see this thing.

I got this um whale [snorts] above this as well. I got all this stuff in this one one shop. Look at that. Yeah. Do you have any violet crumble on you right now? No. No. That's not the best Australian chocolate. Oh, I always think of it as the the pinnacle. It's my favorite. It's my It's my favorite chocolate.

And uh and it just happens to come from Australia. Uh amazing. Uh well, Chat Chat loves you. Was great to finally meet and congratulations on all the launches. the scale at which you guys are operating is is uh really incredible and it's it's super fun to chat. Yeah, we'll talk to you soon. Appreciate it.

Have a good rest of your day. Cheers, Cliff. Uh before we bring in our next guest, let me tell you about Turbo Puffer Search every bite serverless vector and full text search built from first principles on object storage fast 10x cheaper and extremely scalable.

Our next guest is Jerry Murdoch, the co-founder of Insight Partners. He served as managing director until April of 2011, led investment strategy and developed many of the firm's portfolio investment. Jerry, are you in the re waiting room?