Canva was acquired LeonardoThe company is a generative AI content and research startup looking to ramp up investments in its AI tech stack.
Financial terms of the acquisition were not disclosed, but Canva co-founder and chief product officer Cameron Adams said it was a combination of cash and stock. All 120 Leonardo.ai employees will join Canva, including the company’s management team.
“Leonardo will continue to operate independently from Canva and will focus on rapid innovation, research and development backed by Canva’s resources,” Adams told TechCrunch. “All of Leonardo’s existing tools and solutions will continue to be available. This acquisition is intended to help develop Leonardo’s platform and grow its user base with our investments, including expanding our API business and investing in research and development of the underlying model.”
Founded in 2022, Sydney-based Leonardo.ai was originally going to focus on creating assets for video games (the startup’s founders met while working at video game companies), but the Leonardo.ai team then decided to build the platform to address more scenarios, such as creating and training AI models for image creation across industries like fashion, advertising and architecture.
Currently, Leonardo.ai offers collaboration tools and a private cloud for models, including a video generator, as well as access to APIs that allow customers to build their own tech infrastructure on top of Leonardo.ai’s platform.
Leonardo.ai differentiates itself from other generative AI art platforms by the amount of control it gives users, co-founders Jachin Bhasme, JJ Fiasson, and Chris Gillis told TechCrunch in an interview last December. For example, Leonardo.ai’s Live Canvas feature allows users to enter a text prompt and then easily sketch out what they want the end result to look like. As the user sketches, Leonardo.ai creates a photorealistic image in real time based on both the text and sketch prompts.
It’s unclear how Leonardo.ai trains its in-house generative models, such as its flagship model, Phoenix, but it’s an important question to ask about any generative AI service, given the legal ramifications of training copyrighted content without permission. When we asked for clarification, a Leonardo.ai spokesperson remained vague, saying only that the models are trained on “licensed synthetic data and public/open-source data.”
Canva itself has been relatively supportive of creators’ adoption of generative AI, promising to pay out $200 million over the next few years to creators who agree to use their content to train the company’s AI models.
rapid growth
Leonardo.ai has over 19 million registered users, and its tools have been used to create over 1 billion images.
Adams said Leonardo.ai, which raised more than $38.8 million in funding from backers including Smash Capital, Blackbird, Side Stage Ventures, TIRTA Ventures, Gaorong Capital and Samsung Next prior to the acquisition, will be instrumental in contributing to Canva’s Magic Studio generative AI suite.
“We’re excited to explore integrating Leonardo’s technology into Magic Studio,” said Adams. “This will include further enhancing our existing Magic Studio tools as well as bringing new generative AI capabilities directly into Canva that leverage Leonardo’s models. We’re still in the early stages and will be working together soon to determine what this will look like, but we’re excited to expand what our users can do with AI in Canva.”
Canva has been investing in generative AI tools since December 2022, starting with Copywriting Assistant. Magic LightHowever, with an IPO in sight, the company has been ramping up its development efforts in recent months, both through internal projects and acquisitions. Kaleidoscopeis developing a drag-and-drop background removal service for images and videos, and Adams says Kaleido laid the groundwork for many of Canva’s recent generative AI efforts.
Leonardo.ai is Canva’s eighth acquisition overall and its second this year, and comes three months after it acquired the British design company. Affinity The deal, acquired for an estimated $380 million, also owns presentation startup Zeetings, free stock photo sites Pixabay and Pexels, and Czech Republic-based product mockup app Smartmockups.
Founded in 2012, Canva has raised over $560 million (at a most recent valuation of $26 billion), has nearly $2 billion in revenue, and boasts more than 180 million monthly users worldwide.
“This is an important and natural next step in our efforts to build the most powerful all-in-one visual AI product,” said Adams. “We’ve been focused on building AI-powered workflows, including generative solutions like image and design generation. Combining Canva’s workflows with our new generative capabilities will help us differentiate our AI offerings and continue to deliver new possibilities to the growing base of teams and businesses that use Canva.”
