In a significant move to enhance its generative AI offerings, Canva has acquired Leonardo.ai, a startup specializing in generative AI content and research. The acquisition, which was finalized on July 29, 2024, underscores Canva’s commitment to expanding its AI tech stack and enhancing its suite of creative tools.

Expanding AI Horizons

While the financial terms of the deal remain undisclosed, Canva’s co-founder and chief product officer, Cameron Adams, indicated that the acquisition involves a combination of cash and stock. All 120 employees of Leonardo.ai, including the executive team, will be integrated into Canva’s workforce.

Leonardo.ai will continue to operate independently, focusing on rapid innovation and research and development, now backed by Canva’s substantial resources. The existing tools and solutions offered by Leonardo.ai will remain available, with plans to further develop the platform and expand user growth through additional investments in API business and foundational model R&D.

Leonardo.ai’s Journey and Offerings

Founded in 2022 and based in Sydney, Leonardo.ai originally aimed to create video game assets. The startup’s founders, who met while working at a video game company, later expanded the platform to serve a broader range of industries including fashion, advertising, and architecture. Today, Leonardo.ai provides collaboration tools, a private cloud for models, video generators, and APIs for building custom tech infrastructures on its platform.

Leonardo.ai differentiates itself through its user control features, such as the Live Canvas, which allows users to input a text prompt and sketch to generate photorealistic images in real-time. Despite the innovation, the specifics of how Leonardo.ai trains its models, including its flagship model Phoenix, remain somewhat opaque, raising questions about the use of copyrighted content for training purposes.

Integration with Canva’s Magic Studio

Leonardo.ai’s impressive user base of over 19 million registered users and the creation of more than a billion images highlight its impact in the AI field. Canva plans to integrate Leonardo.ai’s technology into its Magic Studio generative AI suite, enhancing existing tools and introducing new capabilities powered by Leonardo’s models.

Canva has been steadily investing in generative AI since the introduction of its copywriting assistant Magic Write in December 2022. The company’s recent development efforts, coupled with strategic acquisitions, signal a robust commitment to AI innovation. Previous acquisitions, such as Kaleido in 2021, have laid the groundwork for Canva’s generative AI advancements, and the recent acquisition of Affinity further strengthens its design capabilities.

Canva’s Growth Trajectory

This acquisition marks Canva’s eighth overall and its second this year, reflecting its aggressive expansion strategy. Canva’s portfolio includes presentations startup Zeetings, free stock photography sites Pixabay and Pexels, and the Czech-based product mockup app Smartmockups.

Founded in 2012, Canva has raised over $560 million and is valued at $26 billion, with an impressive revenue stream approaching $2 billion annually. The platform boasts over 180 million monthly users worldwide.

Future Prospects

Adams emphasized that this acquisition is a natural progression in Canva’s mission to build the most comprehensive visual AI platform. By integrating Leonardo.ai’s generative AI capabilities, Canva aims to enhance its workflow and deliver innovative solutions to its growing user base.

With the ongoing focus on AI-powered workflows, Canva is well-positioned to continue leading in the digital design space, offering unparalleled tools for teams and enterprises.

Source: TechCrunch