Pre-IPO Investment Opportunity with Canva Stock

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Pre-IPO Investment Opportunity with Canva Stock

Canva has established itself as a leading platform for design and communication, employing cutting-edge technology like artificial intelligence (AI). Its AI-enabled tools and user-friendly software empower individuals to craft graphics, videos, and presentations effortlessly. For instance, Canva's Magic Eraser feature allows users to effortlessly eliminate any unwanted elements from images.

The company is just scratching the surface of its potential to utilize generative AI to provide even more creative opportunities. Canva is gaining prominence as a formidable rival in the design software realm, competing against titans like Adobe (ADBE -0.04%). Boasting over 170 million active users monthly, the company's vast and rapidly expanding user base is generating substantial recurring revenue. Furthermore, unlike many start-ups, Canva is already proving its viability by being profitable.

The anticipation among investors for Canva's initial public offering (IPO) is palpable. This segment offers insights on investing in Canva's stock before its public debut and alternative investments to consider as you wait for its IPO.

IPO

An Initial Public Offering (IPO) signifies the first sale of stock by a private company to the public, thereby becoming a publicly traded entity.

Is Canva publicly traded?

No, as of late 2024, Canva has not yet completed its IPO and remains a privately held company.

When will Canva IPO?

When will Canva IPO?

Canva currently does not have an IPO scheduled for 2024. However, the appointment of Kelly Steckelberg as its chief financial officer in late 2024 has raised speculation about the possibility of Canva going public in the near future. Steckelberg's experience in taking Zoom public has rekindled enthusiasm among investors.

How to buy

Since Canva isn't publicly traded yet, interested investors cannot purchase shares via their brokerage account. Nonetheless, fund options exist for pre-IPO shareholders. For instance, Fundrise Innovation Fund invested $6 million in Canva in September 2023, making the fund a potential avenue for individuals wanting to secure pre-IPO shares. The fund is accessible to all investors and can be invested in with a modest minimum of $10 per share.

Investors looking for more direct exposure to Canva's growth trends can explore alternative publicly traded options while awaiting the company's IPO. The following are three Canva alternatives worth considering:

Adobe

Adobe is a dominant player in the design software market, offering a suite of products to help designers create visually captivating graphics. Adobe has developed its AI tools to empower creators to harness the power of artificial intelligence.

Autodesk

Autodesk specializes in software for architects, engineers, designers, builders, manufacturers, 3D artists, and production teams. Its software helps clients create better product designs. Autodesk's software suite concentrates on four key areas: architecture, engineering, and construction; AutoCAD and AutoCAD LT; manufacturing; and media and entertainment.

Microsoft

Microsoft is a force to be reckoned with in the technology sector, with products catering to productivity, cloud computing, social networking, and gaming. Microsoft is also an early proponent of AI, having invested heavily in OpenAI, the developer behind ChatGPT. Microsoft is integrating AI powers by OpenAI into its offerings to enable more users to advance their productivity through AI.

Cloud Computing

Cloud computing refers to a network of interconnected servers and data centers working together to deliver services through the Internet. Investors interested in alternative Canva options can acquire shares of any brokerage account. Here's a step-by-step guide for investing in these software stocks:

Step 1: Open a brokerage account

Before investing in any company, you'll need to open and fund a brokerage account. Research and find the best brokerage to cater to your specific investing needs.

Step 2: Set your budget

Determine an investment budget before making your first trade. Calculate what percentage of your money you'd like to allocate to your selected stocks.

Step 3: Do your research

Thoroughly research the selected companies to ensure they exhibit growth potential and are aligned with your investment goals. Learn about their competitors, balance sheet, revenue streams, and other relevant factors.

Step 4: Place an order

Once you've opened your brokerage account, set your investment budget, and thoroughly researched the company, it's time to place your order through the brokerage platform. Simply input the relevant information, such as company name, the number of shares you wish to purchase, and execute the trade.

Here's a paraphrased version of the provided text:

  • The number of shares you wish to acquire or the amount you want to invest to procure divided shares.
  • The stock identifier code (for instance, ADBE for Adobe, ADSK for Autodesk, MSFT for Microsoft).
  • Whether you want to submit a limit purchase order or a market purchase order. (Our platform proposes utilizing a market purchase order due to the assurance of purchasing shares immediately at the market cost.).

After finishing the order form, click on the 'submit' button to initiate your trade, becoming a shareholder of one of these Canva alternatives' equivalents.

The purchase process for initial public offering (IPO) shares like Canva when it becomes public is similar. Once shares become available, choose Canva's designated stock identifier code to buy shares through your brokerage account.

Profitability

Is Canva profitable?

As a private company, there isn't a large amount of accessible, public information about Canva's profitability. However, Canva is said to have "long been profitable and cash-flow positive," according to the Fundrise Innovation Fund, and The Wall Street Journal claims the company has been profitable since 2017.

Canva is expanding its revenue at a rapid pace, which is advantageous for future profitability. CNBC reported that Canva's revenue had an annualized run rate of more than $2.5 billion in late 2024. That's up from $2 billion in revenue in 2023. Rapidly increasing revenue and earnings are essential drivers for growing the value of shareholders over a long period.

Should I invest?

Should I invest in Canva?

Canva isn't public yet and probably won't complete an IPO in the near future. This provides investors with plenty of time to investigate the company. This research is crucial because it could validate your investment theory that Canva will be profitable when it goes public, or it may alter your viewpoint.

Part of the research process involves considering the following potential factors that might prompt you to buy shares when the company goes public:

  • You think Canva can outperform Adobe as the industry leader in design software.
  • You expect the company's adoption of AI will prove beneficial in the long term.
  • You believe the company can continue increasing its revenue and profits at an impressive pace.
  • You appreciate investing in founder-led companies.
  • You're comfortable investing in stocks that can be volatile, which is typical for IPO stocks.
  • You think Canva can grow into its already high pre-IPO valuation.

On the other hand, the following potential factors might dissuade you from buying shares of Canva when it goes public:

  • You're concerned Adobe will counter Canva by releasing innovative and affordable solutions.
  • You're uncertain about AI's impact on the company's growth.
  • You prefer investing in less volatile stocks, which will likely be true for Canva when it completes its IPO.
  • You're more of a value investor and believe Canva's roughly $32 billion pre-IPO valuation is high for a company only generating $2.5 billion in annual revenue.

ETF options

ETFs that track Canva

Since Canva isn't a publicly traded company, it's not present in many passive investment funds, such as exchange-traded funds (ETFs).

ETF

An exchange-traded fund (ETF) allows investors to acquire several stocks or bonds simultaneously. However, there are some publicly available investment funds with exposure to Canva:

  • Fundrise Innovation Fund: The Fundrise Innovation Fund is a venture capital investment fund, accessible to all investors. The fund held 15 assets in late 2024, including privately held companies like Canva, Anthropic, Databricks, and ServiceTitan.
  • T. Rowe Price Blue Chip Growth Fund (TRBCX 0.9%): The mutual fund managed by T. Rowe Price (NYSE:TROW) invests in a range of growth-focused companies. Although primarily investing in publicly traded stocks, it has also invested $99.1 million in Canva.

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Learn how to invest in Elon Musk's space exploration company.**## The final thoughts on Canva

Canva is one of the more anticipated IPOs. The design software company is growing rapidly as it competes with industry behemoth Adobe. It's also an early adopter of AI, which could serve as a significant growth driver. These characteristics make it an interesting stock to watch as it gets ready to go public.

FAQ

Canva Investing FAQ

Has Canva completed its IPO?

As of late 2024, Canva had not completed an IPO. However, it recently hired a new CFO who has experience taking a company public, which suggests that the company may be gearing up for an IPO.

Is Canva a private or public company?

As of late 2024, Canva is still a private company. It hasn't completed an IPO and doesn't seem to have concrete plans to go public in the near future.

How do I buy pre-IPO shares?

Not many investors can acquire pre-Initial Public Offering (IPO) shares of a company like Canva. Yet, they can still tie into the business through a fund that incorporates pre-IPO shares. Take the Fundrise Innovation Fund, for instance, which invested $6 million in Canva towards the end of 2024. This fund is accessible to everyone and demands a meager minimum investment.

What's the estimated worth of Canva's stock?

Canva concluded a funding round in September 2021, approximating the company's value at $40 billion. However, this valuation has since decreased. Shares of the company were exchanged for a total of $1.6 billion in 2024 on the secondary market. These transactions assessed the company's value at $32 billion. This represented an enhancement of $6 billion compared to the previous trading of shares on the secondary marketplace.

Matt DiLallo has stakes in Adobe and Zoom Communications. Our Website is also invested in Adobe, Autodesk, Microsoft, and Zoom Communications. Our Website recommends the following options: long January 2026 $395 calls on Microsoft and short January 2026 $405 calls on Microsoft. Our Website follows a disclosure policy.

In the context of Canva's potential growth and future financial matters, here are two sentences that include the given words:

  • Investors must consider Canva's financial performance, such as its revenue growth and profitability, when deciding whether to invest in the company's IPO, assuming it goes public.
  • Canva's expansion into the realm of generating revenue through its investing in cutting-edge technologies, like AI, could have significant implications for the company's financial strategy and prospects.

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