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Canva has gone from a simple social media asset designer to a nearly $1B ARR platform looking to displace the traditional productivity suite (email, word processor, spreadsheet) with the visual communication tools that have become essential for sales & marketing, product, HR and potentially everyone in an organization (slides, images, videos).
With its now-$40B valuation, Canva's long-term upside hinges on how well it can sell this platform into the enterprise with Microsoft Office ($35B ARR) and GSuite (3B+ users) standing in the way.
Our research on Canva's path upmarket has generated a few key learnings:
- Our expert estimates that only about 10% of Canva's revenue is coming from enterprise plans today, but adoption of the product is widespread, with free users in every Fortune 500 company.
- While both are bucketed as design products, only about 20% of Canva's basic graphic design use cases overlap with those of Figma. Canva differentiates by making design accessible to the entire organization for everyday design like creating decks, social media assets, and brochures & pamphlets.
- CAC is expected to rise over time with more capital inflows in the space and saturation of the early adopter segment, but Canva expects to average down while going upmarket via high retention, referral, and using their highly engaged base of free users for lead generation.
Thanks!Â
Jan
A Series E head of brand design on the sources of Figma's stickiness
We interviewed the head of brand design at a fast-growing Series E startup to better understand how and why teams use Figma.
Here are some of our biggest takeaways after talking to our expert about what makes Figma valuable:
- Figma has a lack of direct substitutes which makes switching hard once teams have become accustomed to it. Teams use Figma for brainstorming, prototyping, user research, and to hand off the design system to developers—other tools don't do all of that.
- One of the core utilities of Figma is easing the handoff from developer to designer. Figma's product does that by providing designers with the ability to think like a developer, while Sketch, InVision and Adobe XD are more purely 'drawing' products.
- Figma is relatively easy to self-serve into even for bigger companies because IT departments that centralize purchasing on software like Salesforce or Hubspot will devolve buying decisions on tools like Figma to the design team thanks to (1) the lower, more flexible pricing, and (2) the less sensitive files involved.
