Canva has proven for years that it can do what many high-growth startups struggle to do: grow quickly and make money at the same time. Things get stuck when it comes to generative AI.
The design software company Reducing the expected sales growth rate by a third to 20% after the higher-than-expected costs of deploying AI capabilities caused adoption to slow. Canva CEO and co-founder Melanie Perkins shared Assets User demand for new AI features “significantly exceeded” the company’s expectations,
“This confirmed demand, but also showed us that we needed to reduce the cost of performing an AI task to support widespread adoption,” Perkins said by email. “Rather than fully introduce a product before the underlying economics were ready, we chose to slow adoption while we rebuilt the architecture, reduced unit costs and strengthened the business model.”
The cost issue comes at a crucial time for Canva, as AI is central to Canva becoming a more comprehensive workplace software platform. Perkins previously told Assets that the AI market is too fragmentedand Canva has since added Tools including Canva Code as it aims to expand beyond design into enterprise operations.
This highlights a broader dilemma rippling across the software industry: companies can’t afford to sit out the AI boom, but capitalizing on it can undermine the lucrative economics of the companies they’re trying to protect.
“AI no longer makes SaaS a zero marginal cost solution, which I would really call the secret sauce of a lot of software to date,” said Derek Hernandez, a senior research analyst at Pitchbook who covers the intersection between SaaS and AI Assets. “People want a much more powerful product and solution, which with today’s technology means the cost of use becomes a truly global challenge for all of these companies.”
Perkins said in her email that Canva has reduced cost per task by nearly 90% since launch Canva AI 2.0 an agent upgrade to the Canva platform in April, but with Canva AI users creating three times as many designs as in the previous version of Canva AI, the company is focused on improving its economics. Figma, Canvas’ parallel marketplace for the public market, has revealed its version of the AI trade-offs: its free cash flow margin fell from 27% in the first quarter to 14% in the second quarter. forecast Third-quarter sales growth was 36%, a slowdown from the June quarter of 48%.
AI costs reduce SaaS margins
Hernandez said Assets that Canva and Figma are the “biggest signals” that AI is disrupting the traditional SaaS model, as rising inference costs – the recurring costs of processing AI requests – are now showing up in slower growth for Canva and margin compression for Figma.
“If you have a basic analogy with a car, all it takes to build a Ford F150 would be training, and then fuel, mechanic costs and everything else would be conclusions because that’s the point of using the product,” Hernandez explained. “Canva and Figma both hit the same wall about five days apart, but cited it in different places.”
Realigning AI costs is particularly important as Canva explores a potential IPO. Assets reported last year that an employee stock sale valued Canva at $42 billion When experts said the company could go public in 2026, Hernandez said now Assets Canva is targeting a time possibly next year. With the “decision to basically put the brakes on the introduction of AI,” Canva is thinking about investors.
“I’m sure they’re trying to protect their profitability, especially if they want to go to public investors,” Hernandez said.