The price of AI: Canva’s Leonardo acquisition worth at least $320 million

Neither Canva nor Leonardo.AI or its backers wanted to talk about the dowry paid for their marriage, but documents from key investor Blackbird Ventures suggest the acquisition deal cost is north of $320 million.

Details are beginning to emerge about what when down following the surprise announcement this week that the Sydney-based generative AI startup tagged as the next Canva was instead becoming part of the design platform.

Media reports put the bounty on Leonardo’s head at $320 million, based on documents from venture firm Blackbird, Canva’s largest shareholder as well as having a substantial stake in the gen AI startup, having been part of a $47 million in a combined Seed and Series A raise in December last year.

At the time the company was valued at around $121 million.

The AFR reported it had Blackbird’s stake being worth “$29.7 million [in June], implying the whole company was worth about $320 million”. The Fin cited a Blackbird spokesperson confirming the sale price was higher than that figure, without offering a valuation.

But this is where the figures get rubbery. The anomaly is that the AFR previously reported Blackbird, along with other media, as having a 20% stake in Leonardo.AI. Capital Brief’s Bronwen Clune reported on the day of the M&A deal that Blackbird invested $14 million and within six months valued its stake at $60 million to put the figure at $300 million.

So either Blackbird had 10% of Leonardo or it only invested $7 million. Perhaps it was the latter, because co-leading that December round was Ben Grabiner’s new VC kid on the block, Side Stage Ventures, which has a $20 million fund. As one his first investments, he’d be putting the house on black if Side Stage coughed up $14 million too.

Perhaps the only certainty is that venture partners will complain about the media not getting their facts right while simultaneously refusing to offer any. Even more than nature, journalists abhor a vacuum and find something to fill it.

Meanwhile, another detail emerged today with Grabiner confirming to Clune that his fund is now a Canva shareholder. According to Capital Brief, “sources close to the deal confirmed that investors opted for Canva shares, while the Leonardo founders also took cash”.

Offshore investors in Leonardo.AI include Smash Capital, TIRTA Ventures, Gaorong Capital and Samsung Next.

Kudos to cofounders Jachin Bhasme, JJ Fiasson and Chris Gillis, for getting pocket money from mum and dad, just 18 months after launching Leonardo in December 2022.

With Canva cranking up plans to list publicly in the US in the next year or two, and everyone, including private equity looking to grab a slice of the action amid the 10-year-old VC funds that backed Canva hitting their use-by date, there’s little doubt that Leonardo’s backers, especially those who double-dipped, are hoping for an even bigger payoff from the merger deal when Canva finally floats, generating massive windfalls from generative AI.

Canva’s shopping spree over the last several years has 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.

Just four months, Canva snapped up UK professional graphic design business Affinity for an undisclosed sum, estimated to be $1.35 billion.

Canva is currently worth $39 billion.