The generative AI company many believed would become a tech unicorn is instead being acquired by one, with design platform Canva snapping up content and research startup, Leonardo.AI.
The deal price and terms have not been disclosed, so it’s not not how much is cash and/or Canva shares ahead of its IPO plans, but it’s a win-win for VC fund Blackbird, a cornerstone Canva investor, which also backed the nascent gen AI startup in a $47 million Series A raise in December last year. Also look for grins on the faces of investors at Side Stage Ventures, Smash Capital, TIRTA Ventures, Gaorong Capital and Samsung Next, eight months on from backing Leonardo.AI.
Given the venture capital poured in, and the potential Canva, worth $39 billion, sees in generative AI platform, it’s a nine-figure deal. Leonardo.AI was already seeking Series B funding, and the previous round last December is believed to have valued the tech startup north of $120 million.
Blackbird tipped $14 million into the newcomer and within six month valued its stake at $30 million, which could put Leonardo.AI’s worth north of $250 million. There’s speculation the price tag will top $300 million. That’s still a modest outlay for the profitable design giant, which only four months ago added UK professional graphic design and photo editing software business Affinity to its portfolio for an undisclosed sum estimated to be $1.35 billion.
The shopping spree’s also included British data startup Flourish in 2022, SlidesCarnival last year, Kaleido and Smartmockups in 2021, Pexels and Pixabay in 2019 and Sydney-based interactive presentation startup Zeetings in 2018.
Leonardo.Ai cofounders Jachin Bhasme, JJ Fiasson and Chris Gillis
Leonardo.AI launched in December 2022, offering users a new way to develop anything from gaming characters to entire gaming worlds, advertising media, fashion lines, architectural designs and more, including sketching with AI and videos.
Within a year it was generating 4.5 million images daily, 18 months on, 1 billion have been produced. It became one of Discord’s most popular channels.
It recently released a new foundational model, Phoenix, and users can custom-train models with their own datasets. The business employs a team of 120 researchers, engineers, and designers.
In just 18 months, Leonardo.AI has built a user base of 19 million registered users, already 10% of the 190 million monthly users Canva has gained after a decade in business.
The win for Canva is that it gets a fast-growing generative AI business to underpin its increasingly fierce fight for market share with the likes of Adobe and Microsoft with generative AI users. Leonardo.AI has the deep pockets and firepower of a major Australian tech company and its massive customer base as potential users.
Leonardo.AI cofounder and CEO JJ Fiasson said the business will accelerate the pace of its innovation under Canva’s ownership.
“Joining the Canva family means we can invest more deeply in scaling our AI research efforts globally, and move even faster to deliver new features and functionality to creatives worldwide,” he said.
Canva cofounder Cameron Adams said the acquisition bolsters their ability to supercharge our growing suite of AI products.
“This field is constantly evolving, and Leonardo’s technical leadership and community impact can’t be overstated,” he said.
Leonardo’s technology will also complement Canva’s Magic Studio, a suite of AI tools used more than 7 billion times since it launched in 2023
It will remain a standalone business under Canva’s control.
Leonardo.AI prompt: Da Vinci’s Last Supper featuring the Canva cofounders and Blackbird partners in a Surry Hills Italian restaurant
EDITOR’S NOTE: For the lead picture, and the one directly above, we wrote the prompt: “Da Vinci’s Last Supper featuring the Canva cofounders and Blackbird partners in a Surry Hills Italian restaurant” in Leonardo.AI.
Apparently the model doesn’t know about Melanie Perkins, let alone Blackbird’s Robyn Denholm, Phoebe Harrop and Samantha Wong.
And the Leonardo.AI descriptor below revealed things we didn’t know about Blackbird’s Rick Baker and his “distinctive bald head”, along with the VC’s silent partner Bill Puddicombe.
We’ll give credit for Cliff’s “warm smile” but suspect even his wife would not describe his face as “angular” and feel that generative AI models have some way to go from outright tripping to simple hallucinations.
Here’s Leonardo.AI’s explanation of the images:
“In a cozy Surry Hills Italian restaurant, a modern twist on Da Vinci’s iconic Last Supper unfolds, featuring the Canva cofounders and Blackbird partners seated around a long, dark wood table adorned with crisp white linens, ornate silverware, and fine glassware. The cofounders, Cameron Adams and Cliff Obrecht, sit at the center, flanked by the Blackbird partners, Rick Baker and Bill Puddicombe, all dressed in modern attire, with subtle hints of Italian flair. Cameron, with his bright blue eyes and short, dark hair, wears a navy blazer, while Cliff, with his warm smile and angular face, sports a light gray shirt. Rick, with his distinctive bald head and bushy eyebrows, sits to the left, wearing a charcoal suit, and Bill, with his sandy-blond hair and gentle features, sits to the right, dressed in a light blue shirt. The warm, golden lighting of the restaurant casts a sense of intimacy and camaraderie, as the group engages in lively conversation, surrounded by the rich aromas of Italian cuisine, vintage wine bottles, and rustic wooden accents on the walls. The atmosphere is vibrant, yet understated, capturing the essence of a convivial evening among friends and collaborators.”
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