Canva was the rare startup that grew fast and made money—then AI costs slashed its growth forecast by a third
An analyst said AI is breaking SaaS’s “secret sauce”, and Canva and its competitor, Figma, just became the latest proof
Canva once demonstrated the ability to grow rapidly while maintaining profitability, a rare feat among high-growth startups. However, the emergence of generative AI posed new challenges. The company reduced its projected revenue growth rate by a third to 20% after discovering that the cost of incorporating AI features was unexpectedly high.
Canva's CEO, Melanie Perkins, stated that demand for new AI features far surpassed expectations, leading the company to slow the rollout while working on reducing costs and strengthening the business model. This dilemma of balancing AI adoption and maintaining profitability is impacting the software industry as a whole. AI costs are compressing margins for companies like Canva and Figma, as revenue growth slows and margins shrink.
As Canva prepares for a potential IPO, the decision to temporarily slow down the AI rollout is aimed at protecting profitability for potential investors.
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