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How Does Canva Make Money? Canva Business Model In A Nutshell

Canva is a graphic design platform renown for its simplicity and the fact that it is freely accessible to users. The platform follows a freemium model, where users are prompted to subscribe (Canva Pro) to get more features at $12.99/month. Other plans comprise Canva Enterprise ($30/month). Other services are Canva Print (allowing consumers to print a chosen design on physical material) and the Marketplace, where designs are sold at one-time, and Canva takes a cut of the sales.

Origin story

Canva is a graphic design service allowing users to create presentations, posters, logos, business cards, e-books, documents, and social media graphics.

The company was founded in Sydney, Australia, by Melanie Perkins, Cliff Obrecht, and Cameron Adams in 2012.

It was Perkins in particular who provided the impetus for the formation of Canva.

While studying at university, she noted that existing design platforms offered by Microsoft and Adobe were extremely difficult to use and also expensive.

As a result, she set out to make design accessible to everyone – regardless of their skill, ability, or means.

To test the viability of her idea, she and Obrecht created an online school yearbook design company called Fusion Books.

The service was an immediate success and exists to this day, but Perkins was intent on expanding the concept.

In 2010, she was invited to pitch her idea to Silicon Valley investor Bill Tai.

Two years after her initial pitch, Canva secured the backing of major investors and a team of tech engineers to build the platform out.

Canva revenue generation

Canva is free to use, but the company has added several income streams over the years.

Here is a look at each.

Canva Pro

Canva Pro is a premium subscription plan packed with additional features for $12.99/month.

The plan is aimed at graphic design professionals who need access to premium animations, fonts, and priority support.

Canva Enterprise

Canva charges $30/month for their Canva Enterprise plan.

As the name suggests, this plan is perfect for large businesses who need to manage design teams, assign roles, create shared folders, and grant various access rights.

Educational institutions receive a discount on the plan, while non-profit organizations can access Enterprise features for free.

Canva Print

Canva Print allows consumers to print a chosen design on physical material. This may include business cards, postcards, flyers, invitations, or t-shirts.

Canva charges for this service according to the type of physical product, order volume, and country of residence.

In some cases, customization requests will also attract an additional charge.

Marketplace

For those with no desire to sign up for the Enterprise or Pro plan, Canva charges a one-time fee for single usage of a premium design.

For every sale, Canva takes 35% and gives the remainder to the design creator.

For content sold in the Pro subscription, creators receive 50% of the net revenue earned less taxes and payment processing fees.

Design school

Canva also offers a range of online and in-person classes relating to design, branding, and social media.

Each is run and hosted by Canva employees with relevant expertise.

Online classes are offered for free, while those conducted in person start from $5.

Canva becomes a platform business model

Canva has been a product for years. Yet, by 2022, the company transitioned into a platform business model.

What’s the difference?

When you shift the core paradigm of the company from developing all the features needed to enhance the product, when enabling others to, quickly, expand the use cases, features, and applications of the product.

That is when a shift from the product to the platform business model happens!

canva-app-marketplace

Indeed, on Canva, you can now find many applications which enhance the capability of the platform.

From graphic applications to AI applications.

As Canva launched its API, it started to enable developers to build on top of it.

As Canva explains:

A Canva app is a JavaScript file that runs inside an iframe. This file can render a user interface within Canva and then access a number of APIs for interacting with the users’ design. With those interactions you have the ability to create powerful new features for Canva’s 100+ million users

This is a historical transition for the company, since its inception, and it marks up an important change toward becoming a platform and business ecosystem, rather than just a product!

Canva transition toward becoming an AI platform

Another critical turning point for Canva was the experimentation with new AI tools to enable creators to build graphics much faster.

This comprises text-to-video generation, which lets users quickly turn their prompts into graphics that can be customized.

This is part of the core trend of the coming decade, where we’ll see most software companies turning into AI companies.

Thus, we’ll see the rise of AI business models.

Key takeaways

  • Canva is a graphic design platform that aims to level the playing field in design. It was created by Australian university students who recognized that existing design software was expensive and had a prohibitively steep learning curve.
  • Canva makes money through two subscription plans. Canva Pro is ideal for single users while Canva Enterprise is best suited to businesses that need to manage design teams.
  • Canva also drives revenue through a marketplace service, allowing users to purchase content as and when they require it. The company also makes money by printing designs onto physical items such as t-shirts, postcards, and business cards.

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Related Business Model Types

Platform Business Model

platform-business-models
A platform business model generates value by enabling interactions between people, groups, and users by leveraging network effects. Platform business models usually comprise two sides: supply and demand. Kicking off the interactions between those two sides is one of the crucial elements for a platform business model success.

Marketplace Business Model

marketplace-business-models
A marketplace is a platform where buyers and sellers interact and transact. The platform acts as a marketplace that will generate revenues in fees from one or all the parties involved in the transaction. Usually, marketplaces can be classified in several ways, like those selling services vs. products or those connecting buyers and sellers at B2B, B2C, or C2C level. And those marketplaces connecting two core players, or more.

Network Effects

network-effects
A network effect is a phenomenon in which as more people or users join a platform, the more the value of the service offered by the platform improves for those joining afterward.

Asymmetric Business Models

asymmetric-business-models
In an asymmetric business model, the organization doesn’t monetize the user directly, but it leverages the data users provide coupled with technology, thus have a key customer pay to sustain the core asset. For example, Google makes money by leveraging users’ data, combined with its algorithms sold to advertisers for visibility.

Attention Merchant Business Model

attention-business-models-compared
In an asymmetric business model, the organization doesn’t monetize the user directly, but it leverages the data users provide coupled with technology, thus having a key customer pay to sustain the core asset. For example, Google makes money by leveraging users’ data, combined with its algorithms sold to advertisers for visibility. This is how attention merchants make monetize their business models.

Wholesale Business Model

wholesale-business-model
The wholesale model is a selling model where wholesalers sell their products in bulk to a retailer at a discounted price. The retailer then on-sells the products to consumers at a higher price. In the wholesale model, a wholesaler sells products in bulk to retail outlets for onward sale. Occasionally, the wholesaler sells direct to the consumer, with supermarket giant Costco the most obvious example.

Retail Business Model

retail-business-model
A retail business model follows a direct-to-consumer approach, also called B2C, where the company sells directly to final customers a processed/finished product. This implies a business model that is mostly local-based, it carries higher margins, but also higher costs and distribution risks.

B2B2C

b2b2c
A B2B2C is a particular kind of business model where a company, rather than accessing the consumer market directly, it does that via another business. Yet the final consumers will recognize the brand or the service provided by the B2B2C. The company offering the service might gain direct access to consumers over time.

Crowdsourcing Business Model

crowdsourcing
The term “crowdsourcing” was first coined by Wired Magazine editor Jeff Howe in a 2006 article titled Rise of Crowdsourcing. Though the practice has existed in some form or another for centuries, it rose to prominence when eCommerce, social media, and smartphone culture began to emerge. Crowdsourcing is the act of obtaining knowledge, goods, services, or opinions from a group of people. These people submit information via social media, smartphone apps, or dedicated crowdsourcing platforms.

Open-Core Business Model

open-core
While the term has been coined by Andrew Lampitt, open-core is an evolution of open-source. Where a core part of the software/platform is offered for free, while on top of it are built premium features or add-ons, which get monetized by the corporation who developed the software/platform. An example of the GitLab open core model, where the hosted service is free and open, while the software is closed.

Open Source vs. Freemium

open-source-business-model
Open source is licensed and usually developed and maintained by a community of independent developers. While the freemium is developed in-house. Thus the freemium give the company that developed it, full control over its distribution. In an open-source model, the for-profit company has to distribute its premium version per its open-source licensing model.

Freemium Business Model

freemium-business-model
The freemium – unless the whole organization is aligned around it – is a growth strategy rather than a business model. A free service is provided to a majority of users, while a small percentage of those users convert into paying customers through the sales funnel. Free users will help spread the brand through word of mouth.

Freeterprise Business Model

freeterprise-business-model
A freeterprise is a combination of free and enterprise where free professional accounts are driven into the funnel through the free product. As the opportunity is identified the company assigns the free account to a salesperson within the organization (inside sales or fields sales) to convert that into a B2B/enterprise account.

Franchising Business Model

franchained-business-model
In a franchained business model (a short-term chain, long-term franchise) model, the company deliberately launched its operations by keeping tight ownership on the main assets, while those are established, thus choosing a chain model. Once operations are running and established, the company divests its ownership and opts instead for a franchising model.

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