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Published 20 March 2013 08:16, Updated 10 April 2013 07:42
Online design platform Canva has lured private equity guru Adrian MacKenzie back into play, alongside Blackbird Ventures, Facebook executive Lars Rasmussen and Yahoo chief financial officer Ken Goldman to a seed funding round Photo: Dom Lorrimer
The numbers are smaller than his private equity plays, but former CVC Asia Pacific executive Adrian MacKenzie has joined a high-profile angel investment in very good company.
MacKenzie joins a roll-call of prominent US and Australian investors including Facebook executive Lars Rasmussen, Yahoo chief financial officer Ken Goldman and Seek co-founder Paul Bassat in a $1.6 million seed funding round for local online design start-up Canva. The company is also $1.38 million richer thanks to a Commercialisation Australia grant and all before it has unveiled a product or turned over a dollar.
Canva chief executive officer Melanie Perkins’ journey from a chance meeting with US venture capitalist Bill Tai to $3 million and a swag of backers is a tale of persistence and the power of networks. The 25-year-old first met Tai, who has also invested in local start-up Posse.com, in 2010 at an awards ceremony. At the time, Perkins was running Fusion Books, a software company that helps schools design yearbooks.
In 2011, over coffee at University Cafe in Palo Alto, Perkins pitched Tai her idea to disrupt the design industry with innovative software hosted in the cloud. He told her to get a technical co-founder, who could develop the software, and he would consider backing the idea.
Perkins declines to provide further detail on exactly what Canva will be, before the product is unveiled in May. The company’s website is just a homepage – a nicely designed one of course – where users can register their interest.
To describe Canva’s target market, Perkins is equally vague, saying it will “appeal to both designers and non-designers.”
Bassat, who invested in Canva through Square Peg Ventures which he runs with Justin Liberman, sheds a bit more light saying the software “combines the simplicity of Word with the functionality of Adobe.”
He tells The Australian Financial Review that the Canva team are “obsessed about the product experience”.
Although they hadn’t yet found their technical co-founder, Perkins and her Canva co-founder Cliff Obrecht attended Tai’s annual entrepreneur and kiteboarding conference Mai Tai, in Hawaii in May 2012. There they met US entrepreneur Dave Bagshaw, the former chief executive of Shutterfly, an online platform for designing photobooks. Bagshaw was the first person to commit to the investment round.
Perkins describes the exclusive conference as initially “the most intimidating thing in the whole world” but it ended up being one of two key planks in securing the seed round. The other was in July when Canva was the number one trending start-up on online angel investment database AngelList, she says.
Through Mai Tai and AngelList and a subsequent spider web of introductions, Canva pulled in new Australian fund Blackbird Ventures and US funds Matrix Partners and InterWest Partners to be its three key investors. Blackbird Ventures co-founder Rick Baker, who is MLC Private Equity’s former venture capital guru, introduced MacKenzie to the company.
Mackenzie, who abruptly departed CVC in September when the firm was struggling to restructure Nine Entertainment Co’s $3.8 billion debt, says Canva is one of a number of investments he has in digital and online companies. He says Canva’s “all-star team” was an important factor in his decision to back the company, despite the unknown that lays ahead.
“It’s going to be challenging to take on this new world of design meets collaboration,” he said.
Alongside MacKenzie individuals like Rasmussen, Goldman (who is linked because Mai Tai is held at his Hawaiian holiday house) and former Mint.com chief technical officer Jean Sini have invested. Palo Alto accelerator 500 Startups has also backed the round.
As well as investing, Rasmussen introduced Perkins and Obrecht to their third co-founder Cameron Adams, who was the lead designer at Google Wave and is now Canva’s chief product officer.
There are nine full time team members at Canva’s Surry Hills head office, including five developers. Perkins says she has had the vision for Canva since 2007, when she was watching students struggle in design tutorials at the University of Western Australia, but the software development did not begin until August.
Although Perkins and the team have raised a significant seed round for Canva before proving the product with customers, she is confident that the software will be a hit. “We’ve been able to learn from all of those experiences [working on Fusion Books],” she says.
Fusion Books made yearbooks for 250 schools locally in 2012 and Perkins expects this number to double in 2013.
Bassat is not blind to the leap of faith needed to invest at such an early stage, but says the team has “super high energy and they are young, but really impressive”.
“It’s really hard and really risky at this stage,” Bassat says. “[To invest] we look at the people, the particular problem being solved and how they’re going about solving the problem. Canva really felt like they ticked all three of those boxes.”
This story first appeared on The Australian Financial Review.