Skip to content
minibusinessideas

Case study · Canva

How Canva went from school yearbooks to 750,000 users in its first year

TL;DR

Canva started with a narrow, practical business: an online tool that let Australian schools design yearbooks. That business funded the founders’ learning, and after more than 100 investor rejections they raised a seed round, launched Canva in 2013, and reached 750,000 users in its first year. Canva is venture-backed, so it is not a bootstrapping story, but the lessons about starting in a small market and offering a free product are useful to any small founder.

How it started

According to Fortune, Melanie Perkins was teaching design to fellow college students in 2007 when she grew frustrated with tools like Adobe InDesign, which she found clunky and expensive. Rather than take on all of design at once, she and Cliff Obrecht started with the Australian high-school yearbook market. Their company Fusion Books launched in 2011 with a contracted tech team and sold a web-based yearbook editor to schools.

At its peak, Fusion Books published yearbooks for 400 high schools, but the founders knew a yearbook business could only go so far. In 2012 Perkins spent months in San Francisco pitching venture capital and heard more than 100 rejections. Fortune reports that investors were uncomfortable with a couple as co-founders, with an overseas deal, and with the founders’ lack of technical backgrounds.

The turning point came through a gathering of kitesurfers and investors in Maui. There they met Rick Baker, who was starting Blackbird Ventures. They pitched him a design platform they called Canvas Chef; the pizza metaphor faded and the “s” was dropped when the canvas.com domain was not available. Blackbird’s $1.3 million, plus a matching grant from the Australian government, got Canva running. Investors then asked for a technical co-founder, and former Google designer Cameron Adams joined. The team moved from Perth to Sydney to find technical talent.

How they got the first customers

Canva’s earliest paying customers were not Canva users at all. They were the schools that bought yearbooks from Fusion Books, which taught the founders about web-based design tools and gave them a working business while they raised money.

Canva then launched in August 2013. Forbes reports that the launch drew a couple of tech-blog reviews and few users at first, while Fortune reports that Canva attracted 750,000 users in its first year. The sources reviewed for this study do not give a detailed breakdown of how those first users arrived, so treat the exact acquisition mix as unverified.

What drove growth

Fortune describes Canva’s business as built on a freemium subscription model: the tool is free, with paid features and team plans. Perkins resisted investor pressure to ship a product immediately and waited until 2013 so the first release matched the quality she wanted.

Growth also meant slow, expensive infrastructure work. In 2016 Canva launched in six languages besides English. In 2017 it began a rewrite of its code base, known internally as Editor 2, and Fortune reports that for two years the team could not ship new features to users while that work was done.

By Fortune’s October 2022 account, Canva had 90 million monthly active users, 10 million paid subscribers, and about $1 billion in 2021 revenue. It had raised $580 million from investors and had been profitable on a free-cash-flow basis every year since 2017.

Lessons you can copy

  1. 1Start in a market small enough to winThe founders chose school yearbooks before attempting general design. A narrow first market gave them customers, revenue, and a product to learn from.
  2. 2Sell something concrete while you build the big ideaFusion Books paid for years of learning. A modest paying business can keep you alive through a long build.
  3. 3Do not launch before the product is goodPerkins waited until 2013 so the tool matched her vision. A slower first launch can pay off when the product depends on first impressions.
  4. 4Use a free tier to reach beginnersCanva’s freemium model suited people who had never used design software. For consumer-type products, a free plan can be the main way into a market.
  5. 5Expect rejection and keep adjusting the pitchMore than 100 investors said no before the right one said yes. Persistence worked because the founders kept improving what they showed investors.

Frequently asked questions

Did Canva bootstrap?

No. Fortune reports Canva raised about $580 million from investors. Its early yearbook business, Fusion Books, was a revenue-generating company before Canva, but Canva itself was venture-funded.

How did Canva start?

The founders first built Fusion Books, a yearbook design business for Australian schools, then pitched investors on a broader design platform and launched Canva in 2013.

What can a small founder learn from Canva?

Begin with a narrow market you can serve, let a small paying business fund your learning, and offer a free plan that beginners can try. A smaller way to apply the idea is to design templates for people who use Canva.

Start something similar

More case studies