Canva’s Plan to Beat Figma

Key Takeaways

So, Canva's one of those companies, so it it's a design software company and right now the software market is going through a lot. You know, we've all heard about the SaaS apocalypse. And Canva's one of those companies that a lot of investors had their eye on for a while as being a potential IPO candidate. And so, we saw Figma, which was another sort of similar company with, you know, a different customer focus, but also a design company, go public and their stock, you know, rocketed the first day last June when they or last July when they did their offering and then it immediately started dropping. And so, the core argument and the fundamental thesis that I put forth in my recent column about Canva is that they were actually smart to wait to go public because even though this fanfare and this hype was building for so many years, the decision to wait means that when they actually do start trading and when they do take the leap, their shares are much more likely to be stable. Now, is there anything different about Canva and Figma's businesses? It's the same general category, I know, but is this the exact type of consumer or customer that they're going after? Not exactly. So, I would say the biggest difference between Canva and Figma that is the most noticeable is just the difference in size and the difference in the revenue size. Um Canva was around 4 billion in ARR, um 3 billion in actual revenue in 2025. Figma's revenue was much lower, closer to 2 billion. And, you know, if you look at the two companies, they are serving really different customer segments. So, Figma has about 13 million um monthly users. Canva has a lot more. And Canva really got its start in the consumer market. It got its start, you know, selling its I mean, both of them operate on this sort of like freemium model, but Canva got its start giving its product and selling its product to individuals, to small businesses, to companies that are a lot smaller. Figma has always been really focused on selling into larger enterprises. And so, that's where the difference in their customer base comes. And then, of course, like a classic tech story that we see with so many companies, both of them are sort of pushing onto each other's turf at this point. Right. It's kind of funny. I I do think about so, the SaaS apocalypse is very much here and now, at least in terms of what the market is saying. I sort of think about whether a consumer-focused company or an enterprise-focused company would be more protected in this design story from the SaaS apocalypse. And I you know, I I know Figma has, you know, they they've got the enterprise story, but Canva, I mean, we've seen you know, even with companies like Notion. I mean, when you have a community that really gets around a product, it you know, sometimes it can be sticky. Yeah, absolutely. And it's a little bit counterintuitive, right? Because I think in the broader market with AI right now, you're hearing this narrative of like Anthropic has focused on the enterprise, OpenAI has focused on consumer. And I think folks, investors that I've talked to have seen a lot of promise in Anthropic's enterprise focus right now. But in a in a roundabout way, it's sort of the opposite story if you think about Canva and Figma. Because Canva has these users who at the end of the day, the likelihood that they're going to go and use an AI tool to vibe code their own design tool or to really do something complex using prompting is unlikely. And I talked to several marketers, I talked to some designers for this story who told me that they really like how easy it is to use Canva. That the interface is simple and they like the level of control they have, too. So, I thought one interesting thing was one of the marketers I spoke to said that, you know, she every once in a while will noodle noodle around in Figma. It's a lot harder to use, but, you know, the other thing that she doesn't like as much with some of the platforms that are just vibe coding platforms or even just going to ChatGPT or going to Claude is that she doesn't have that control. She has to prompt every single time she wants to make a change. And so, I think Canva has really found that this niche in users who are not the most AI native, they're not the most cutting edge necessarily or they don't want to be, but they prefer that simple user interface. Whereas Figma tends to be used for a little bit more of complex design tasks. So, that would be, you know, your UX design, your web design. Whereas Canva's used really heavily by marketers, people who want to post on social media. And um I think that makes them a little bit more resilient to this AI platform shift. Because if we see a lot of people kind of switching their workflows over to things like ChatGPT and Claude, it's less likely, in my opinion, that those users are going to switch off of something like Canva. Right. Did you have you I I don't know if it's even launched. I saw that the the Figma shares were falling yesterday and they continue to fall today on Google's new AI design tool, which I mean, it's yet another data point to show that these bigger companies are uh I mean, they're they're going to try to to throw everything they can at it. You know, it I wanted to also ask you about the IPO market though because this is sort of a a separate story here. You mentioned in your story we've got SpaceX and OpenAI and probably Anthropic coming down the pipeline. What are the bankers telling you about how Canva would fare up against issuances like that? So, to your earlier point, of course, it is a highly competitive space and the Google offering, you know, kind of came out of left field, but at the same time, I think a lot of big tech companies have seen what Canva has done, seen the fact that they've been able to be profitable for 8 years and sort of looked at that story and are seeing opportunity there. I think there's a big difference between um you know, Canva versus Figma and that comes down to valuation. If you look at Canva where they last raised money at a $42 billion valuation, that multiple is close to like 10 times. Figma actually went public at a much higher multiple of revenue. And so, you know, that difference is kind of important and notable. And when I talked to bankers, a lot of them were, you know, the the the sentiment was about the valuation. And at the end of the day, Akoshet comes down to the price that Figma or Canva decides to go out into the market. And so, you know, it is a tough time and there are plenty of other offerings that are going to go to market, but I think at the end of the day, investors will assess Canva on a standalone basis. What it's really going to come down to is is that IPO priced um and is it pricing in the future risk and the potential for AI to eat away at its business long term. And and so, what do we know about timing in so far as what Canva is thinking? Are they still looking to go public this year, next year? What do we know? So, the news that I reported in my column is that Canva is planning on an IPO next year at some point. Next year. Okay. Well, feels like it's been next year for the last 3 years, right? So, I'll believe it when I see it is what I will say. All right. Well, Anita, I want to thank you for coming on. That is Anita Ramaswamy, our financial analysis columnist here at The Information.