Canva Acquires Leonardo.ai to Boost Its Generative AI Efforts

Canva has acquired Leonardo.ai, an AI content and research startup, as the company looks to deepen its investments in its AI technology stack.

Financial terms of the deal were not disclosed, but Canva co-founder and chief product officer Cameron Adams said it was a combination of cash and stock. All 120 Leonardo.ai employees will join Canva, including the executive team.

“Leonardo will continue to operate independently from Canva, focusing on rapid innovation and R&D, supported by Canva’s resources now,” Adams told TechCrunch. “We will continue to offer all of Leonardo’s existing tools and solutions. This acquisition is intended to help Leonardo grow its platform and deepen user growth through our investments, including expanding our API business and investing in R&D for core models.”

Founded in Sydney in 2022, Leonardo.ai was originally supposed to focus on creating video game assets. (The startup’s founders met while working at a video game company.) But then the Leonardo.ai team decided to build the platform to cater to more scenarios, such as creating and training AI models to generate images across industries like fashion, advertising, and architecture.

Today, Leonardo.ai offers collaboration tools and a private cloud for models including video generators, as well as access to APIs that allow customers to build their own technical infrastructure on the Leonardo.ai platform.

Co-founders Jashin Bhasmi, JJ Viason, and Chris Gillis told TechCrunch in an interview last December that Leonardo.ai stands out from other AI-powered art platforms in the amount of control it gives users. For example, Leonardo.ai’s Live Canvas feature lets users enter prompt text and then quickly sketch out what they want the end result to look like. As the user sketches, Leonardo.ai creates a realistic image based on the text and sketch prompts in real time.

It’s unclear how Leonardo.ai trains its in-house generative models like its flagship Phoenix model, an important question to ask about any generative AI service given the legal implications of training models on copyrighted content without permission. Leonardo.ai’s PR remained vague when we asked for clarification, saying only that the models are trained on “licensed, industrial, publicly available/open source data.”

Canva itself has been relatively supportive of creators embracing generative AI, pledging $200 million over the next several years to pay creators who agree to have their content used to train the company’s AI models.

tremendous growth

Leonardo.ai has over 19 million registered users, and its tools have been used to create over a billion images.

Leonardo.ai, which has raised more than $38.8 million in capital from backers including Smash Capital, Blackbird, Side Stage Ventures, TIRTA Ventures, Gaorong Capital and Samsung Next prior to the acquisition, will help contribute to Canva’s generative AI suite Magic Studio, Adams says.

“We’ll be looking to integrate Leonardo’s technology into Magic Studio, which is something we’re very excited about,” Adams said. “This could include making Magic Studio’s existing tools even more powerful, or introducing new generative AI capabilities powered by Leonardo’s models directly into Canva. It’s early days, and we’ll be working together to determine what this looks like right away, but we’re excited to expand what our users can do with AI on Canva.”

Canva has been investing in generative AI tools since December 2022, starting with its content writing assistant Magic Write. But — with an eye on an IPO — it has ramped up its development efforts in recent months through internal projects and acquisitions. In February 2021, Canva acquired Kaleido, maker of a drag-and-drop background removal service for images and video. Adams says Kaleido laid the foundation for much of Canva’s more recent generative AI efforts.

Leonardo.ai is Canva’s eighth acquisition overall and its second this year, coming three months after it bought British design firm Affinity for an estimated $380 million. Canva also owns presentation startup Zeetings, free stock photography sites Pixabay and Pexels, and the Czech Republic-based mockups app Smart.

Founded in 2012, Canva has raised over $560 million (most recently at a $26 billion valuation), generates nearly $2 billion in revenue, and boasts over 180 million monthly users worldwide.