When will Canva list? Here’s why investors’ patience may pay off in the next 2 years

When will Canva list? This has been a hot question for several years now. The latest answer seems to be not for at least a couple of years, but it is anyone’s guess. Nonetheless, we thought we’d take a closer look at the company and how its listing may turn out.

Who is Canva?

Canva is a graphic design company that was founded in Australia but is now a global company with users practically everywhere. It was founded by then Perth residents Cliff Obrecht and Melanie Perkins who wanted to make it easier to design school yearbooks. Because of how much Canva is used and how fast it has grown, the company is hailed as a home-grown tech success story. Canva was most recently valued in April 2024 at over US$26bn (A$40bn), earns over $1.7bn in revenue, has 16m paying subscribers and 185m monthly users.

Canva is a private company but has raised several rounds of funding in the last decade, most famously raising $3m in 2013 after being rejected by over 100 venture capitalists. It is hoped that the company will go public eventually. Retail investors and institutions that haven’t been able to get a piece of the company want one. Many believe more growth is to come, particularly as AI in graphic design rises.

And although it is rare to find a growth tech company that is profitable, Canva is. And many of its venture capitalist firms are keen to sell out. Blackbird Ventures and AirTree Ventures have held for over 10 years, a timeframe that is usually a limit for them so far as holding investments is concerned. Blackbird put in $3m a decade ago, a holding worth over $1bn, at least on paper.

Despite rumours of listing, nothing has eventuated as of yet. But there is hope that the wait could long be over.

So when will Canva list?

Perhaps in the next 12-18 months. Why? Well, the ending of the Tech Wreck and re-opening of the IPO window has helped. Just look as Life 360’s successful NASDAQ listing, and companies that are coming to market in the coming months including Guzman y Gomez and Chemist Warehouse. Another clue is the degree of engagement the company has made with prospective investors, particularly at the Morgan Stanley Australia Summit in early June 2024. Cliff Obrecht gave an IPO pitch in all but name, telling investors of the growth opportunity ahead – targeting 1bn users and 50% annual growth.

The listing would likely have happened by now had it not been for the Tech Wreck. Because even when private, Canva’s valuation was impacted – falling from a peak of US$40bn.

Rising interest rates have decimated the valuation tech stocks, public and private alike. A series of tech listings in 2023 (Klaviyo, Instacart and Arm Holdings) led to hope that the market for listings might invigorate – and the door would open to Canva. With the performance of these companies being mixed at best, this did not eventuate. But now, in mid-2024, with interest rates about to commence their decline, and the IPO volume coming back on many major global exchanges, the prospects of a Canva listing are back on.

Would Canva list on the ASX?

Keep in mind that even if it listed, there’s no guarantee that Canva would list in Australia. If it did, there would be a big gain for the ASX. At its current valuation, it would just make it into the Top 15 ASX stocks. It would be easily the largest technology stock, dwarfing WiseTech (ASX:WTC) and Xero (ASX:XRO), which are only half the size of Canva.

It may opt to list on Wall Street, a move that would make it more difficult for Aussie investors to access but easier for American investors, particularly large institutions. If Canva had a dual-class share structure, or chose to create one at IPO, it would be barred from listing on the ASX and have to go abroad, just like Atlassian.

But we probably could still have pride in it as a home grown success story.

Keep watching Canva

Even if you don’t intend to buy it at IPO, keep an eye on it, because if and when it lists, it could be a sure sign that the IPO market is re-opening again – or perhaps by that point, the market will have exited its long, cold winter already. It will also finally be the chance to own shares in the company and be part of a major growth story.

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