(Bloomberg) — Canva Inc. is buying image-generation startup Leonardo.AI in its second acquisition this year, accelerating its push into artificial intelligence to take on creative-software giant Adobe Inc.
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The deal, which took about a month to close, allows Canva to integrate the small company’s video and image generation model into its own products. Co-founder Cameron Adams told Bloomberg News it’s Canva’s quickest acquisition to date. It comes just months after Australia’s largest startup bought Affinity, a software popular with Apple Inc. Mac users, for hundreds of millions of pounds. Canva did not specify Leonardo.ai’s valuation, and Adams declined to provide details.
Canva, which raised $26 billion this year, is one of the fast-growing creative software developers chasing market leader Adobe Inc. CapCut, a video-editing app from Bytedance, the company that owns TikTok, is also rapidly gaining users.
With the acquisition, Canva is gaining a 120-person team from Leonardo Eye, which develops software that lets users generate and edit images online using text prompts. The startup, founded in 2022, is backed by Canva investor Blackbird Ventures and raised $31 million last year. Canva says more than 1 billion images have been created using its platform in the past 18 months.
Leonardo.ai’s services will add to Canva’s growing suite of AI tools, which the company hopes will help it poach some of Adobe’s biggest enterprise clients and accelerate revenue growth.
Founded nearly a decade ago by Adams, Cliff Obrecht and Melanie Perkins, Canva grew as a rival to Adobe, the longtime leading provider of software for graphics professionals. Adobe has recently added AI capabilities across its products, but its shares have fallen more than 10% this year since a deal to acquire Figma for $20 billion fell apart in December.
Investors have long viewed Canva as a potential public offering candidate, but the company hasn’t discussed specific plans. Co-founder and Chief Operating Officer Obrecht said in a previous interview that the company recently completed a secondary stock sale for $2.5 billion.
The Australian startup has now announced eight acquisitions, including Affinity, visual AI startup Kaleido.ai, and image providers Pexels and Pixabay.
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“Generative AI can’t just be one thing,” said Adams, who is also Canva’s chief product officer. “We’re entering a whole new world where we can change and adapt the output that generative AI provides.”
(Updates with details of previous transaction from second paragraph onwards)
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