In a significant move to bolster its generative AI capabilities, Canva has acquired Leonardo.ai, a promising startup specializing in generative AI content and research. This acquisition marks a major step in Canva’s strategy to deepen its investment in AI technology and enhance its platform’s capabilities.
Canva’s Strategic Acquisition
The financial terms of the deal remain undisclosed, but Canva’s co-founder and Chief Product Officer, Cameron Adams, confirmed it involves a combination of cash and stock. Importantly, all 120 employees of Leonardo.ai, including its executive team, will join Canva, continuing to operate independently while leveraging Canva’s substantial resources for rapid innovation and development.
“Leonardo will continue to run independently of Canva with a focus on rapid innovation, research, and development, now backed by Canva’s resources,” Adams told TechCrunch. “We’ll keep offering all of Leonardo’s existing tools and solutions. This acquisition aims to help Leonardo develop its platform and deepen their user growth with our investment, including by expanding their API business and investing in foundational model R&D.”
The Journey of Leonardo.ai
Founded in 2022 and based in Sydney, Leonardo.ai initially focused on creating video game assets. The startup’s founders, who met while working at a video game company, later expanded the platform to serve various industries, including fashion, advertising, and architecture. Today, Leonardo.ai provides collaboration tools, a private cloud for models, video generators, and APIs that enable customers to build their own tech infrastructure.
One of Leonardo.ai’s distinguishing features is the level of control it offers users. The Live Canvas feature, for example, allows users to enter a text prompt and create a quick sketch of their desired outcome. The platform then generates a photorealistic image based on both text and sketch prompts in real-time. This unique approach has set Leonardo.ai apart from other generative AI art platforms.
Canva’s AI Ambitions
Canva’s commitment to supporting creators in adopting generative AI is evident in its promise to allocate $200 million over the next few years to compensate creators whose content is used to train the company’s AI models. This acquisition of Leonardo.ai is part of Canva’s broader strategy to integrate advanced AI capabilities into its platform.
With over 19 million registered users and more than a billion images created using its tools, Leonardo.ai brings significant value to Canva. Prior to the acquisition, Leonardo.ai raised over $38.8 million from investors, including Smash Capital, Blackbird, Side Stage Ventures, TIRTA Ventures, Gaorong Capital, and Samsung Next.
“We’ll look to integrate Leonardo’s technology into Magic Studio, which we’re very excited about,” Adams said. “This might include making existing Magic Studio tools more powerful or introducing new generative AI capabilities powered by Leonardo’s models directly in Canva. It’s early days, and we’ll be coming together right away to determine how this looks, but we’re excited to expand what our users are able to do with AI on Canva.”
A Track Record of AI Innovation
Canva has been steadily investing in generative AI tools since December 2022, starting with the copywriting assistant Magic Write. The company has accelerated its AI development efforts through internal projects and acquisitions, including the purchase of Kaleido, a maker of drag-and-drop background removal services for images and video, in February 2021. This acquisition laid the foundation for many of Canva’s recent AI innovations.
Leonardo.ai is Canva’s eighth acquisition overall and its second of the year, following the purchase of U.K. design company Affinity for an estimated $380 million. Canva also owns presentations startup Zeetings, free stock photography sites Pixabay and Pexels, and the Czech-based product mockup app Smartmockups.
Looking Ahead
Founded in 2012, Canva has raised more than $560 million, with its most recent valuation at $26 billion. The company generates nearly $2 billion in revenue and has over 180 million monthly users worldwide.
“It’s a significant but natural next step in our efforts to build the most powerful, all-in-one visual AI offering,” Adams said. “We’ve placed a strong focus on building an AI-powered workflow that includes generative solutions like image and design generation. Pairing that Canva workflow with new generative capabilities will help us continue to set our AI offering apart, and deliver new possibilities for the growing base of teams and enterprises using Canva.”
The acquisition of Leonardo.ai underscores Canva’s commitment to pushing the boundaries of what’s possible with generative AI, promising exciting new tools and capabilities for its vast user base.