Canva CEO Melanie Perkins' AI gamble: can Canva Craft fix the cost problem before an IPO?
Melanie Perkins built Canva into a profitable design giant. Now AI costs have cut its growth forecast and its valuation, and Canva Craft is her answer.
Canva CEO Melanie Perkins is trying to turn an expensive AI launch into a lasting advantage before the company goes public.
This week Canva launched Canva Craft, the first image generation model built by its own research team. The launch came two months after Perkins told shareholders that Canva would grow more slowly than planned, because serving AI features to hundreds of millions of users cost far more than expected.
The two announcements are connected. Canva Craft is part of Perkins' plan to rely less on outside AI models, cut the cost of every AI request and protect the profitability that has made Canva one of the world's most valuable private software companies.
Melanie Perkins built Canva after more than 100 investor rejections
Melanie Perkins was born in Perth, Western Australia, in 1987. While studying at the University of Western Australia she tutored students in design software and found it slow and hard to learn.
In 2007 she and Cliff Obrecht started Fusion Books, an online yearbook design business. When they tried to raise money for a broader design platform, more than 100 investors turned them down. Former Google designer Cameron Adams joined as the third co-founder, Blackbird Ventures became the first major institutional investor, and Canva launched in 2013.
By the end of 2025 Canva reported more than 265 million monthly active users, more than 31 million paying users and about $4 billion in annual recurring revenue. It has produced positive free cash flow every year since 2017, which is rare for a high-growth software company.
Canva AI 2.0 and the cost problem
In April 2026 Canva launched Canva AI 2.0, an agentic upgrade that can generate whole campaigns from a prompt and carry out design tasks in the background. Perkins called it "the most significant moment in Canva's history."
Take-up was fast. Demand "significantly exceeded" expectations, Perkins told shareholders, and Canva AI users created three times as many designs as before.
But every request cost money. Much of the work ran on frontier models from outside providers, and for a freemium company most users do not pay. "We were relying too heavily on frontier models," Perkins said.
Rather than roll the product out widely before the economics worked, Canva slowed the rollout and spent about three months rebuilding its AI infrastructure.
Why Canva cut its 2026 growth forecast
The result showed up in Canva's second-quarter shareholder update in August. The company cut its expected revenue growth for 2026 from 30% to about 20%.
The business is still growing quickly. Revenue for the June quarter rose 25% to $921.9 million, and Canva held about $1.47 billion in cash. The company has remained profitable.
Canva says the cost of completing an AI task has fallen by nearly 90% since April. Its in-house style transfer model is about 23 times cheaper than comparable frontier models, its image model 30 times cheaper and its video model 17 times cheaper. More than 200 people now work on AI at the company, including more than 140 in its research lab.
Canva Craft: Perkins' answer to frontier-model costs
Canva Craft is the clearest sign of where Perkins is taking the company.
The model was built with researchers from Leonardo.ai, which Canva acquired in 2024. It was trained on human-designed templates, such as posters, presentations, menus and social posts, rather than on photographs. It plans an image first, deciding where elements go and how text fits, and then generates it at up to 2K resolution in 30 aspect ratios.
Canva Craft is available to all users through the Dream Lab tab and through the Canva API. Canva also plans to offer it inside chatbots such as ChatGPT and Gemini, and says two faster, cheaper versions are in development.
For Perkins, owning the model means lower costs, more control over quality and a product that competitors cannot simply rent.
What the valuation markdowns say about Canva
Investors have noticed the slowdown. In August 2025 an employee share sale valued Canva at $42 billion. After the forecast cut, early backers Blackbird and Airtree marked their holdings down 17% to about $34.9 billion, Startup Daily reported. An independent valuation used for the annual employee share issue fell about 20% to $31 billion, and the Australian Financial Review reported shares on offer through the broker Hiive at an implied value of about $30 billion.
Part of the pressure comes from outside Canva. Figma's shares have fallen sharply since its public listing, and investors are asking whether AI tools will make design software easier to replace.
Melanie Perkins and the road to a Canva IPO
Canva has not set a date for a public listing. In 2025 it moved its parent company to Delaware, a step often taken before a U.S. listing, and analysts had expected an IPO in 2026. Pitchbook analyst Derek Hernandez has since suggested Canva may now aim for next year, and that slowing the AI rollout was partly about protecting profits ahead of a listing.
Perkins is also one of the world's richest self-made women. Forbes estimates her net worth at about $7.6 billion, based on a stake of about 18%. She and Obrecht have signed the Giving Pledge, committing to give away more than 80% of their wealth, and in July they launched the Global Goals Platform to help guide the Canva Foundation's future giving.
What comes next for Canva
Perkins' bet is that Canva wins AI design through cost, not just features. If in-house models like Canva Craft can serve free users cheaply, Canva can keep its freemium model, return to faster growth and go to public markets with its profits intact.
If not, the company that grew by making design simple may find that AI has made design simple for everyone else too.
For now, Canva is still growing, still profitable and still led by the founder who heard "no" more than 100 times.
