Melanie Perkins, co-founder and CEO of Canva.
Australian design software startup Canva is on the verge of finalizing a deal allowing long-standing employees and investors to sell over $1 billion worth of stock.
This significant transaction doesn’t aim to raise fresh funds for Canva but rather to facilitate liquidity for existing shareholders, valuing the company at a consistent $26 billion. This move is part of a broader trend among private technology firms, including OpenAI and SpaceX, to enable secondary market sales, offering a pathway for stakeholders to monetize their investment without pursuing public offerings.
This wave of private deals is gaining momentum as many technology firms are deferring their IPOs, looking towards 2025 or beyond. Amidst this, Canva’s approach represents a strategic pivot to provide financial flexibility to its stakeholders. The company, achieving profitability since 2017 and reporting $2 billion in annualized revenue, is leveraging its strong financial position to negotiate these secondary sales, with investment banks orchestrating the transactions to appeal to long-term investors.
Meanwhile, in the broader market, early investors are frequently willing to sell at a discount, especially given the delays in potential public offerings and the cooling of valuations from the recent funding boom. Canva’s last and current secondary sales, for instance, are marked at about 35% lower than the peak $40 billion valuation from its 2021 fundraising. Such adjustments reflect a new pragmatism in the private investment landscape, balancing immediate liquidity needs with long-term value considerations.
As the market for private secondary sales evolves, it becomes an increasingly important tool for companies and investors alike, providing a flexible alternative to traditional public offerings or acquisitions.
This trend underscores a dynamic shift in how startups and investors manage growth and liquidity in a rapidly changing economic environment.
