T. Rowe Price has marked down its stake in Canva by 67.6%


Canva logo on a phone
Image Credits: Mateusz Slodkowski/SOPA Images/LightRocket / Getty Images

Last summer, Blackbird, one of Australia’s largest venture operations, marked down the value of one of its most prized stakes, in the Sydney-based design platform Canva. Valued at $40 billion by investors in a $200 million round in the fall of 2021, Blackbird adjusted its own valuation of the company 36% to $25.6 billion.

Now, T. Rowe Price — the mutual fund Goliath that began investing aggressively into late-stage startups nearly a decade ago, continued to fund them throughout the pandemic, and led the $40 billion round in 2021 — has marked down the value of its stake in Canva even more dramatically, adjusting it by a whopping 67.6%. (T. Rowe’s Blue Chip Growth Fund, which owns several classes of Canva shares but predominantly Series A shares, has to date invested $99.1 million in Canva and states in its most recent prospectus, dated March 31, that it now values those shares on a cost-adjusted basis at $32.1 million.)

Asked for comment earlier today, a spokesperson for Canva downplayed the number, writing in an email: “As a profitable company with very healthy cash reserves, we’re in a fortunate position to continue focusing on building an enduring company for the long term. Regardless of the macroeconomic environment, we’re well positioned to continue doubling down on key initiatives, including growing our team and expanding our product and AI innovation efforts.”

Added the spokesperson, “We’re experiencing rapid and accelerating growth across all of our metrics, having recently surpassed 135 million monthly active users. It would be inaccurate to determine the valuation of Canva based on any one investor in isolation, and with our growth and pace of new product launches, we’re confident that no matter the market conditions, we’ll exceed our last valuation as the markets correct and our growth continues.”

T. Rowe’s investment in Canva represents a minuscule amount of money for the sprawling investment firm. Its Blue Chip Growth Fund had roughly $53 billion in assets under management at the end of the first quarter of this year, down from $63 billion a year ago, in June 2022.

Still, it’s notable that one of the savviest asset managers in the U.S. thinks a company that was for a time the fifth most valuable startup on the planet is currently worth far less — essentially $13 billion and not $40 billion.

Asked if Canva has adjusted its own, independent 409A valuation to match up with T. Rowe’s assessment — T. Rowe’s markdown is really just its opinion, after all — Canva’s spokesperson said its assessment does not match that of T. Rowe but declined to comment further.

Naturally, Canva is far from alone in being emphatically marked down by its backers after soaring to new valuation heights in 2021. Klarna, the Stockholm-based buy-now-pay-later provider, saw an even steeper markdown a year ago, dropping 85% to $6.7 billion, from the $45.6 billion valuation that it was assigned in 2021.

Klarna, which proactively accepted its reduced valuation, has since tightened its lending standards and slashed costs, including through repeated layoffs, and says it is now “firmly on track” to reach monthly profitability in the second half of the year.

Like so many other outfits right now, both companies are actively being transformed by — and looking to take advantage of — generative artificial intelligence.

In a press release late last week, Klarna credited some of its current momentum to OpenAI, saying an integration with its large language model is “accelerating Klarna’s evolution into a digital financial assistant.”

In an effort to maintain its own leading position in the world of graphic design collaboration, Canva has also integrated generative AI across its product suite, telling Fast Company in March that much of what is now infused throughout has been built in-house through long-term investment and acquisition.

Though Canva also relies partly on major large language models — it uses them piecemeal, says its spokesperson — co-founder and CEO Melanie Perkins told FC that it has intentionally relied less on the work of others so that it can promise users that “anything you create in Canva is yours.”

Its customers appear to like what they see. According to Canva, more than 200 million images have been generated with its text-to-image offering, more than 1 billion words have been written with its AI text generator, and nearly 2 billion backgrounds have been removed with its background remover product.

As for AI’s impact on Canva’s valuation going forward, that remains to be seen. While public shareholders will eventually decide what they think the company is worth, an offering isn’t forthcoming, not yet anyway.

Asked about a possible IPO, Canva’s spokesperson said today that there are no plans in sight. Meanwhile in March, Canva co-founder and COO Cliff Obrecht (who is married to Perkins), suggested to Barron’s that it’s now very much top of mind for the 11-year-old company.

“It’s not the right market to go out right now. But obviously, it becomes an inevitability at our size,” he told the outlet. “It’s on the horizon, but not on the imminent horizon.”

More TechCrunch

Welcome to TechCrunch Fintech! This week, we’re looking at the continued fallout from Synapse’s bankruptcy, how Layer wants to disrupt SMB accounting, and much more! To get a roundup of…

There’s a real appetite for a fintech alternative to QuickBooks

The company is hoping to produce electricity at $13 per megawatt hour, which would be more than 50% cheaper than traditional onshore wind.

Bill Gates-backed wind startup AirLoom is raising $12M, filings reveal

Generative AI makes stuff up. It can be biased. Sometimes it spits out toxic text. So can it be “safe”? Rick Caccia, the CEO of WitnessAI, believes it can. “Securing…

WitnessAI is building guardrails for generative AI models

It’s not often that you hear about a seed round above $10 million. H, a startup based in Paris and previously known as Holistic AI, has announced a $220 million…

French AI startup H raises $220 million seed round

Hey there, Series A to B startups with $35 million or less in funding — we’ve got an exciting opportunity that’s tailor-made for your growth journey! If you’re looking to…

Boost your startup’s growth with a ScaleUp package at TC Disrupt 2024

TikTok is pulling out all the stops to prevent its impending ban in the United States. Aside from initiating legal challenges against the government, that means shaping up its public…

As a U.S. ban looms, TikTok announces a $1M program for socially driven creators

Microsoft wants to put its Copilot everywhere. It’s only a matter of time before Microsoft renames its annual Build developer conference to Microsoft Copilot. Hopefully, some of those upcoming events…

Microsoft’s Power Automate no-code platform adds AI flows

Build is Microsoft’s largest developer conference and of course, it’s all about AI this year. So it’s no surprise that GitHub’s Copilot, GitHub’s “AI pair programming tool,” is taking center…

GitHub Copilot gets extensions

Microsoft wants to make its brand of generative AI more useful for teams — specifically teams across corporations and large enterprise organizations. This morning at its annual Build dev conference,…

Microsoft intros a Copilot for teams

Microsoft’s big focus at this year’s Build conference is generative AI. And to that end, the tech giant announced a series of updates to its platforms for building generative AI-powered…

Microsoft upgrades its AI app-building platforms

The U.K.’s data protection watchdog has closed an almost year-long investigation of Snap’s AI chatbot, My AI — saying it’s satisfied the social media firm has addressed concerns about risks…

UK data protection watchdog ends privacy probe of Snap’s GenAI chatbot, but warns industry

U.S. cell carrier Patriot Mobile experienced a data breach that included subscribers’ personal information, including full names, email addresses, home ZIP codes and account PINs, TechCrunch has learned. Patriot Mobile,…

Conservative cell carrier Patriot Mobile hit by data breach

It’s been three years since Spotify acquired live audio startup Betty Labs, and yet the music streaming service isn’t leveraging the technology to its fullest potential — at least not…

Spotify’s ‘Listening Party’ feature falls short of expectations

Alchemist Accelerator has a new pile of AI-forward companies demoing their wares today, if you care to watch, and the program itself is making some international moves into Tokyo and…

Alchemist’s latest batch puts AI to work as accelerator expands to Tokyo, Doha

“Late Pledge” allows campaign creators to continue collecting money even after the campaign has closed.

Kickstarter now lets you pledge after a campaign closes

Stack AI’s co-founders, Antoni Rosinol and Bernardo Aceituno, were PhD students at MIT wrapping up their degrees in 2022 just as large language models were becoming more mainstream. ChatGPT would…

Stack AI wants to make it easier to build AI-fueled workflows

Pinecone, the vector database startup founded by Edo Liberty, the former head of Amazon’s AI Labs, has long been at the forefront of helping businesses augment large language models (LLMs)…

Pinecone launches its serverless vector database out of preview

Young geothermal energy wells can be like budding prodigies, each brimming with potential to outshine their peers. But like people, most decline with age. In California, for example, the amount…

Special mud helps XGS Energy get more power out of geothermal wells

Featured Article

Sonos finally made some headphones

The market play is clear from the outset: The $449 headphones are firmly targeted at an audience that would otherwise be purchasing the Bose QC Ultra or Apple AirPods Max.

5 hours ago
Sonos finally made some headphones

Adobe says the feature is up to the task, regardless of how complex of a background the object is set against.

Adobe brings Firefly AI-powered Generative Remove to Lightroom

All cars suffer when the mercury drops, but electric vehicles suffer more than most as heaters draw more power and batteries charge more slowly as the liquid electrolyte inside thickens.…

Porsche Ventures invests in battery startup South 8 to boost cold-weather EV performance

Scale AI has raised a $1 billion Series F round from a slew of big-name institutional and corporate investors including Amazon and Meta.

Data-labeling startup Scale AI raises $1B as valuation doubles to $13.8B

The new coalition, Tech Against Scams, will work together to find ways to fight back against the tools used by scammers and to better educate the public against financial scams.

Meta, Match, Coinbase and others team up to fight online fraud and crypto scams

It’s a wrap: European Union lawmakers have given the final approval to set up the bloc’s flagship, risk-based regulations for artificial intelligence.

EU Council gives final nod to set up risk-based regulations for AI

London-based fintech Vitesse has closed a $93 million Series C round of funding led by investment giant KKR.

Vitesse, a payments and treasury management platform for insurers, raises $93M to fuel US expansion

Zen Educate, an online marketplace that connects schools with teachers, has raised $37 million in a Series B round of funding. The raise comes amid a growing teacher shortage crisis…

Zen Educate raises $37M and acquires Aquinas Education as it tries to address the teacher shortage

“When I heard the released demo, I was shocked, angered and in disbelief that Mr. Altman would pursue a voice that sounded so eerily similar to mine.”

Scarlett Johansson says that OpenAI approached her to use her voice

A new self-driving truck — manufactured by Volvo and loaded with autonomous vehicle tech developed by Aurora Innovation — could be on public highways as early as this summer.  The…

Aurora and Volvo unveil self-driving truck designed for a driverless future

The European venture capital firm raised its fourth fund as fund as climate tech “comes of age.”

ETF Partners raises €285M for climate startups that will be effective quickly — not 20 years down the road

Copilot, Microsoft’s brand of generative AI, will soon be far more deeply integrated into the Windows 11 experience.

Microsoft wants to make Windows an AI operating system, launches Copilot+ PCs