Canva Inc. is acquiring the image generation startup Leonardo.ai, marking its second acquisition this year as it accelerates its push into artificial intelligence to compete with creative software leader Adobe Inc. The deal, finalized in about a month, allows Canva to integrate Leonardo.ai’s video and image generation models into its own products.
This is Canva’s fastest acquisition to date, according to co-founder Cameron Adams in an interview with Bloomberg News. This acquisition follows Canva’s purchase of the Affinity software suite, popular among Apple Inc. Mac users, for several hundred million pounds. Canva did not disclose the valuation for Leonardo.ai, and Adams declined to provide details.
With a $26 billion valuation from a recent fundraising round, Canva is one of the fastest-growing creative software developers vying with market leader Adobe. CapCut, a video-editing app from TikTok-owner ByteDance Ltd., is also rapidly gaining users.
The acquisition brings Canva a team of 120 from Leonardo.ai, which specializes in software that helps users generate and edit images online with text prompts. Founded in 2022 and backed by Canva investor Blackbird Ventures, Leonardo.ai raised $31 million last year. Canva reported that users have created over a billion images using Leonardo.ai’s platform in the past 18 months.
Leonardo.ai’s services will enhance Canva’s expanding suite of AI tools, aiming to attract Adobe’s enterprise customers and drive revenue growth. Founded about a decade ago by Adams, Cliff Obrecht, and Melanie Perkins, Canva has emerged as a formidable competitor to Adobe, the long-time dominant provider of software for graphics professionals.
Adobe, which has recently incorporated AI features into its products, has seen its shares drop more than 10% this year after a $20 billion deal to acquire Figma fell through in December.
Investors have long viewed Canva as a potential candidate to go public, though the company has not announced concrete plans. Recently, Canva completed a $2.5 billion secondary share sale, as mentioned by co-founder and Chief Operating Officer Obrecht in an earlier interview.
With this acquisition, Canva has now announced a total of eight acquisitions, including Affinity, visual AI startup Kaleido.ai, and image providers Pexels and Pixabay.
