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Why the $2.43 billion Canva share sale is an epic moment for Australian tech

- April 7, 2024 3 MIN READ
Canva cofounders Cliff Obrecht, Cameron Adams and Melanie Perkins.
Canva cofounders Cliff Obrecht, Cameron Adams and Melanie Perkins. Photo: supplied
There are a lot of people who this week are talking to their accountant about capital gains tax for the very first time.

Canva confirmed on Friday that US$1.6 billion (A$2.43bn) worth of shares in the design software platform had changed hands in a secondary market sale, at a valuation of US$26 billion. The total value of shares sold – around 6% of the business – is US$600 million more than first flagged at the start of 2024.

There was US$2.4 billion – another 50% more demand – on the buyer side of the table, which bodes well for the company’s potential float in 2026.

Cofounder and COO Cliff Obrecht, who oversaw the sale “people should have their money”

And yes there will be VCs, their investors and other early-stage backers feeling pleased with themselves, but the more profound aspect is the people who believed in a vision and signed on as “Canvanauts”, receiving shares under Canva’s ESOP (Employee Stock Ownership Plan).

To the absolute credit of cofounders Cliff Obrecht, Cameron Adams and Melanie Perkins, they made their team part of the business, sharing a stake in Canva. It’s been part of the company’s secret sauce, creating a bond that some have described as a cult. Perhaps, but a benign and highly lucrative one for all those who share the faith and have now been rewarded, a decade on, with this deal.

It matters on several fronts. It won’t always be the case, but it does say that an ESOP is real in a profound way. That’s a powerful signal to other founders prepared to share in attracting talent.

It’s also a democratisation in building an Australian business unlike anything we’ve seen before.

When Atlassian floated on the Nasdaq in December 2015 – 11 Dec 2015 – the biggest IPO by an Australian company in the US – the money flowed primary to two big dogs, the billionaire cofounders, who continued to generate income from offloading shares to this day.

Canva sets the benchmark for Australian business.

This is a sharing of success and wealth unlike anything we’ve seen since NRMA and AMP were demutualised two decades ago and members were given shares ahead of their public listings.

It’s not happened at Fortescue, Hancock Prospecting, Visy, Meriton, Westfield, or many of the other Australian companies where billionaires say nice words about the people who deliver the value in their businesses while banking the cash.

And it has the potential to change the employment landscape for millennials and beyond if they’re prepared to take on entrepreneurial risk alongside their pay. Yes, there have been layoffs in tech, but traditional businesses do the same thing. The difference is no one leaves an Australian bank after several years – except the CEO – with a wad of company shares alongside their redundancy pay.

Who would you want to work for?

No doubt it’s business as usual for Obrecht and his cofounder wife, Melanie Perkins, recently named Australia’s 10th richest people. In 2021, the pair pledged to give their fortune away.

It’s a transformative moment in the lives of many Canvanauts, who won’t necessarily be people gagging to become angel investors and pour that money back into the startup ecosystem as newly minted sophisticated investors. More likely they’re just paid down a hefty chuck of their mortgage or school fees and can breath a little easier, or now have enough for a deposit.

Maybe some will use it as a springboard for their own business.

Canva now raised more than $770 million across 14 rounds of funding. The existing valuation of US$26 billion (A$39bn), was set in August 2022 when three of its key Australian investors, Blackbird, Square Peg Capital and Airtree, all agreed to cut their valuation by 36% from US$40bn following a US$200m raise in 2021.

Meanwhile, Sydney private equity firm Quadrant, is reportedly looking to buy $100 million worth of shares from Blackbird, which sold a $150 million stake last year – 3% of its total holding – at the same valuation to New York’s Coatue Management and San Francisco’s ICONIQ Capital.

Last month Fast Company announced Canva at No. 2, just behind Microsoft on its list of the most innovative companies in enterprise for 2024 with a focus on the rise of AI. Canva was recognised for making its easy-to-use visual design and communication tool even easier with AI.

NOW READ: How Melanie Perkins turned Canva into one of the world’s most successful tech companies

 

 

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