Source: Fortune.com
Summary
Canva, a design-software company, has cut its expected revenue growth rate by a third to 20% due to the high cost of delivering AI features. CEO Melanie Perkins stated that the demand for new AI features “significantly exceeded” expectations, but the company needs to reduce the cost of completing an AI task to support a broad rollout. Canva is slowing its rollout while rebuilding its architecture and strengthening its business model. This decision comes as the company evaluates a potential IPO.
Our Reading
The numbers tell one story.
Canva’s AI costs have forced the company to slow its rollout, a move that may protect its profitability ahead of a potential IPO. The company has reduced the cost per task by nearly 90% since launching Canva AI 2.0, but with users creating three times as many designs, Canva is focusing on improving its economics. The AI cost reset carries weight as Canva evaluates a potential IPO, with experts saying the company might be targeting a time next year.
The AI boom is making SaaS no longer a zero marginal cost solution, and companies like Canva and Figma are struggling to adapt.
Author: Evan Null
