In 2015, Airtree backed Canva's $6 million Series A; 6 years later, a partial sale at a $39 billion valuation returned 1.4x its first fund; here's how

Sydney-based venture capital firm Airtree Ventures invested in Canva's $6 million Series A funding round in 2015. Canva was still an early-stage design platform, and the investment gave Airtree a stake in a company that would go on to become one of Australia's best-known technology businesses.

Canva's business model

It was founded by Melanie Perkins, Cliff Obrecht and Camreon Admas and launched in 2013. Its platform made graphic design accessible to people without professional design skills through an easy-to-easy interface, templates and drag-and-drop tools. The company later expanded into business and team-focused products.

Canva reached a $39 billion valuation when Airtree reduced part of its holding in 2021. In September that year, Canva announced a separate $200 million funding round at a $40 billion valuation.

According to TechCrunch's April 11, 2024 report, a more recent Canva share sale generated a return equivalent to 1.4 times the total capital invested in Airtree's first fund.

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Airtree retained most of its stake

The firm did not exit Canva completely. It deliberately maintained the majority of its original holding, preserving the possibility of additional returns if Canva's value rises or it eventually has a major exit.

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Why Airtree sold part of its investment

Airtree co-founder and partner Craig Blair told TechCrunch that the firm seeks opportunities to return money to investors throughout a fund's life cycle rather than waiting exclusively for an acquisition or stock market listing. Partial share sales can provide liquidity while leaving room for future gains.

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How does the strategy work?

These are secondary sales, where the company does not issue new shares to raise fresh capital. Notably, existing shareholders sell some of their shares to buyers, and it allows early investors to realise part of their investment before the company goes public.