EXIT, STAGE BRIGHT: Blackbird offloads $150 million slice of its Canva stake at $39 billion valuation

VC firm Blackbird Ventures has cracked open some of its golden eggs, offloading a small slice of its stake in design platform Canva at a US$25.5 billion (A$38.8bn) valuation in a secondary market sale to US investors.

The deal with New York’s Coatue Management and San Francisco’s ICONIQ Capital is another step down the path towards a US listing for the decade-old, Sydney-based tech company. It realises a major uplift for Blackbird investors after the VC first tipped in A$250,000 at the Seed stage in 2012.

Blackbird is Canva’s largest shareholder, with its holding worth around A$5 billion. Founded in 2012, the same year as Canva , the VC has backed the tech scaleup across eight rounds, most recently in September 2021, when Canva’s valuation peaked at A$54.5 billion in a $273 million raise. Blackbird subsequently valued its holding at $8 billion 

But 12 months ago, Blackbird, along with Canva’s other Big Three VC investors, Square Peg and Airtree, cut Canva’s valuation by 36% amid the broader carnage of private tech company valuations – most notably the Swedish BNPL fintech Klarna, which saw its worth drop 85%. In contrast Canva’s August 2022 estimate has held its ground over the last year, despite tougher times globally for the startup sector

Blackbird holds a 15% stake in Canva, and sold 3% of that from its early funds, for $150 million. Several superannuation funds invested in that fund, including AustralianSuper, Hostplus, HESTA, Telstra Super and Aware Super.

The deal returns around $17 million to Hostplus, a long-term Blackbird supporter, a cornerstone investor in the $225 million 2015 fund.

Blackbird cofounder Rick Baker said the sale to two new highly respected US investors is “a huge vote of confidence” in Canva.

“As we move into the liquidity phase of Blackbird’s early funds, we are delighted to be returning capital to those who backed us right in the beginning, from individuals to super funds,” he said.

“We first invested in Canva just over ten years ago. This sale is just 3% of the total Blackbird funds’ shareholding in Canva. It comes from our early funds, which invested in Canva when it was just an idea in the founders’ minds.

“These funds are getting closer to the end of their fixed term lives and it is time to start releasing some of the returns back to investors. While it’s a small portion of our total holding, it is a significant return of capital to our investors.”

Baker hailed Canva as “a phenomenal success story” and “one of the best software companies in the world”, demonstrating that Australia can produce huge businesses with global impact

“Canva continues to perform exceptionally well off the back of its Worksuite and AI product releases, which are driving strong user and revenue growth,” he said.

“We remain strong supporters of the company and are excited for the remaining 97% of our funds’ shareholding to continue to grow in value.”

Nasdaq ahead?

Startup Daily contacted Canva for comment, but the business declined.

Unlike Australia’s other tech giant, Atlassian, which continues to post eye-watering operational losses 20 years on – the Nasdaq-listed workplace software company’s FY23 loss was $526 million – Canva has been profitable since 2017, with cofounder Cliff Orbrecht telling The Australian that the business is “certainly at the scale where we could IPO” and now has US investors with experience of seeing company through to a public float.

“We have a bunch of big bets we’re still working on that we want to see come to fruition over the coming years before we go public, because we want those things to be proven repeatable and predictable, and that’s kind of what public markets are looking for,” he said.

“But as we grow the pressure builds and we’re not adverse to being a public company, but we’ll do it when the timing is right.”

The Nasdaq has been flirting with Canva in a four-year wooing using its digital billboard in New York’s Times Square, congratulating after it was named as the best workplace for innovation by Fast Company last month.