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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. Because of how much it has used and how fast it has grown, it is hailed as a home-grown tech success story. The company was most recently valued at over US$25bn (A$40bn) and earns over $1.7bn in revenue. It grew sales by 21% in 6 months, has 16m paying subscribers and 150m monthly users.
Canva is a private company but has raised several rounds of funding and it is hoped that it 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.
But despite rumours of listing, nothing has eventuated as of yet.
So when will Canva list?
Not for at least another couple of years, it seems. Why? Because Blackbird and AirTree have committed to keeping shares for at least a couple of years. Although there has been no word from Canva’s own PR department, it is logical to assume nothing will happen until then given the state of the equity markets.
The listing would likely have happened by now had it not been for the Tech Wreck. Because even when private, its valuation was impacted – with its valuation 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 earlier this year (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, Canva is holding off for the time being, as indeed many non-resources companies are.
Would it 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 it and be part of a major growth story.
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