Which startups are based in Sydney, Australia

INTELLIGENT DESIGN

The foundation stone for Melanie Perkins' design app Canva, one of the most valuable software start-ups in the world, was laid on a beach in Perth. Your success is a potential threat to Adobe and Microsoft.

On a mild May morning in 2013, Canva CEO Melanie Perkins floated on a kiteboard in the sea between billionaire Richard Branson's private islands Necker Island and Mosquito Island. The East Caribbean trend was merciless - so the 26-year-old entrepreneur waited for hours to be saved. After all: The dangerous hobby was access to funding for her design software start-up, which she founded with her friend Cliff Obrecht. Based in Australia, Canva was thousands of miles from the Silicon Valley tech hub. So it turned out to be difficult to get a meeting with investors - let alone capital. Over 100 investors had already turned it down when Perkins met Bill Tai, a venture capitalist and kite surfer. So the 26-year-old also devoted herself to this hobby, even if it was harder than originally thought. But kitesurfing would give her access that didn't exist before.

Melanie Perkins
... completed a bachelor's degree in communications, psychology, marketing & management at the University of Western Australia and founded Fusion Books in 2007, a system that can be used to design yearbooks. The Canva design platform followed in May 2012. Perkins is also a Forbes “Under 30” alumna.

Canva started out as a simple yearbook design company in Perth. From there it went all over the world: Canva has become a global hit. More than 20 million users from 190 countries use the app to design everything from colorful Pinterest graphics to elegant menus. In addition to a large selection of free design options, Canvas is the most important point of attraction, which puts competitors like Adobe in the shade, the ease of use. Before Canva, amateurs had to painstakingly put together designs using Microsoft Word or pay hefty sums for confusing professional tools. Today anyone can download a canvas app and create designs within minutes. The company generates income by offering a premium version that contains more functions and designs and costs US $ 10 per month, and recently also with the sale of an offer for a company account. This year Canva expects its revenues to double to US $ 200 million, with the most recent financing round of US $ 85 million valued at US $ 3.2 billion. Perkins, a 2016 "30 Under 30" alumna, has an estimated 15% interest in Canva, which is valued at $ 430 million. In addition, there is her co-founder and fiancé Cliff Obrecht, who owns a similar stake - together they are believed to be worth over US $ 800 million. But as with Atlassian, Slack and Zoom, Canva also has the classic dilemma of the “freemium” model: The app goes viral, millions of users jump on it, but most of them never pay a cent.

And although Canva claims to have users in almost all large companies today, these are mostly just individuals or small teams and no official company accounts. In addition, Canva's rise in the market means, above all, to come into competition more and more with Adobe, the graphics giant with a weight of 149 billion US dollars (market capitalization, note). Adobe raised $ 1.65 billion through its design business alone in the third quarter of 2019. In addition, design start-ups such as Figma and Sketch are also on the rise. Apart from that, Canva also has other rivals thanks to its extensions for videos and presentations: from small apps for creating Instagram videos to Microsoft. “I think we've done a great job, but we're still a long way from achieving what we want. Our mission is to get the world excited about design. And by that I really mean the whole world, ”said Perkins. She started working on Canva back in 2007. As the daughter of an Australian teacher and a Malaysian engineer of Filipino and Sinhala descent, she originally wanted to become a professional figure skater. But when she was explaining the basics of design to her fellow students as a student at the University of Western Australia, she had an idea. The process from a design idea to a printed poster or flyer - creating in Adobe Photoshop or Microsoft Word, converting it, saving it as a PDF, taking it to a copy shop and having it printed - seemed unnecessarily complicated to her in the age of the Internet. Perkins wanted to simplify it. But the problem seemed so obvious that she initially worried that someone else would post a solution to the problem before she did. So she hired freelancers to build her a website so she could target the niche that she felt was safe and at the same time untapped: school yearbooks that are usually the responsibility of volunteer teams of students. Together with Obrecht, she founded Fusion Books and immediately found a market for it. After all, the company partnered with 400 schools, but without venture capital funding, further expansion would not be feasible - and that was exactly what was far from easy to find in Perth, a city built on the pillars of mining and petrochemicals.

Our mission is to get the world excited about design. And by that I really mean the whole world.

In 2011, Perkins seized an opportunity that seemed impossible: when Bill Tai, a seasoned venture capitalist and avid kitesurfer from Silicon Valley, came to Perth, Perkins and Obrecht found out where he was hosting a dinner party and surprised the guests with a pitch in which they compared Canva to a pizza: The design elements were the toppings and the various documents that could be designed - flyers, business cards, menus - symbolized the dough. Back then, Perkins and Obrecht went home with no capital, but with a newfound enthusiasm for extreme water sports. Soon they became a staple of Tai's kitesurfing gatherings, which were also attended by prominent tech executives who wanted to invest in new startups. In the end, this should pay off: Through the regular meetings, they met Cameron Adams, an ex-Google man who had founded a start-up based in Sydney. Adams joined as a consultant in March 2012 and became the third co-founder the following June. Now Canva had a technical manager - and achieved the big breakthrough: Canva received a total of US $ 3 million in start-up funding. In addition, a critical grant was made by the Australian government. But initially there was no big rush - the timing was still perfect. The rise of Instagram and Twitter changed the way companies reach their customers - everyone suddenly cared about their online presence, and Canva was an affordable way to look good on the internet. The number of registrations grew to 50,000 users in the first month. In 2014, when Canva received an additional $ 3 million, 600,000 users had created over 3.5 million designs.

But when it comes to serving large businesses, Canva is still a newbie. Canva for Enterprise was only launched in October 2018 as part of a private event in New York. Canvas’s long-term growth depends on whether companies move from a few individual accounts to accounts for thousands of employees. After years of continuously expanding its offering, Perkins has taken the opposite approach for companies: a limited set of templates and options is intended to encourage employees to create their own content.

But Adobe doesn't sleep during this time: Since 2016, the company has been offering Adobe Spark, its own free app with various templates. Canva says Perkins' tools are used at 50,000 universities and 25,000 nonprofits - Adobe says it has given 23 million free Spark accounts to students and teachers.

Those close to Perkins are sure she can handle the pressure. Guy Kawasaki, who started his career at Apple and traveled the world in the 1980s to promote everything Apple-related, as Canva's investor and chief evangelist, says: “Democratization of design can do more People use it as a Macintosh. You don't have to be in Silicon Valley anymore - yes, you don't even have to be in America anymore - to be successful. This is madness! "

Text: Alex Konrad / Forbes US
Photo: Dean Mackenzie / Forbes US

The article was published in our January 2020 issue of “Radical Change”.