Canva has launched an employee stock sale at a US$42 billion valuation, up from US$32 billion in 2024.

The Australia-based design software company is allowing staff to sell shares to investors such as Fidelity Management & Research and JP Morgan Chase’s asset management arm.

Canva has been adding AI features to its products to attract more corporate customers and compete with Adobe and Figma.

In April, the company introduced new tools, including an AI-powered photo editor.

Canva reported over US$3.3 billion in annualized sales and 240 million monthly active users.

The company has not announced any plans for an IPO but remains seen as a potential candidate by investors.

Employee share sales like this are common among private startups to offer staff liquidity and attract external investment.

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🔗 Source: Bloomberg

🧠 Food for thought

1️⃣ Employee stock sales address growing inequity in startup compensation

Canva’s employee stock sale tackles a fundamental problem that has emerged in startup equity over the past decade.

Research shows that founders today typically receive Restricted Stock Awards at zero cost, while employees get stock options, creating ownership disparities where founders own significantly more equity than early employees2.

This shift has coincided with startups staying private longer, but the median startup employee tenure remains just two years, meaning most employees leave before any liquidity event occurs2.

Canva’s approach of facilitating employee stock sales while remaining private provides immediate liquidity that addresses these structural inequities.

The company’s decision to work with established institutional investors like Fidelity and JPMorgan also suggests they’re creating a sustainable model for ongoing employee liquidity rather than a one-time event.

2️⃣ Secondary sales become competitive necessity in design software race

The timing of Canva’s valuation jump coincides with intensifying competition in the design software market, particularly following Figma’s successful IPO in July that valued the company at $34 billion1.

Canva’s revenue growth to $3.3 billion annualized sales positions it as a serious competitor to Adobe, which has been developing its own AI model called Firefly1.

Industry analysis suggests that Figma’s IPO success has created pressure for other design platforms to either go public or demonstrate strong private market valuations. The employee stock sale allows Canva to maintain competitive talent retention while signaling market confidence, especially as the design software industry faces potential disruption from AI tools that could reduce demand for traditional creative professionals.

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