Digital Nigel
Forum Pro
Yes, that could well be a motivating factor. Serif was lagging in that area.
-
Welcome to the new forums! Please read this first. For known issues we are working to resolve, click here.
Canva Acquires Design Platform Affinity
- Thread starter Night Pixel
- Start date
Digital Nigel
Forum Pro
Yes, and that's how Affinity worked, and it was very profitable.
Topaz still has perpetual licences, not subscriptions.
Digital Nigel
Forum Pro
For anyone thinking that this is a rescue of Serif, remember that Serif was a highly profitable, growing business. It's estimated that the price paid is close to £500m, about 16x annual revenues, and 30x after tax earnings.
Serif’s accounts lodged with the UK Companies House show a highly profitable business awash with cash. It had revenue of £31.2 million in the 2022 calendar year, up 32.9 per cent over 2021, while operating profit rose to £17.9m, up 24.3%. After tax profit rose 19.6%, from £13.8m to £16.5m. It also had a very healthy cash balance of £9.6m, over 30% of annual revenue. That's an incredible profit margin, hence the high valuation for the company.
It also paid very hefty dividends, so the CEO is unlikely to have been short of personal cash.
Serif’s accounts lodged with the UK Companies House show a highly profitable business awash with cash. It had revenue of £31.2 million in the 2022 calendar year, up 32.9 per cent over 2021, while operating profit rose to £17.9m, up 24.3%. After tax profit rose 19.6%, from £13.8m to £16.5m. It also had a very healthy cash balance of £9.6m, over 30% of annual revenue. That's an incredible profit margin, hence the high valuation for the company.
It also paid very hefty dividends, so the CEO is unlikely to have been short of personal cash.
Digital Nigel
Forum Pro
It's not, but it can still buy out Serif's CEO with stock rather than cash. Given the hefty size of Serif's dividends, he probably has no need for a huge cash sum, on which he would have to pay capital gains tax.
AndyGordon
Senior Member
I’ve just had a look at Canva and my initial view is that it’s a lightweight do it all visual presentation tool, geared I would think to small business who don’t want to use costlier, more knowledge intensive products such as Adobe and Microsoft.
As a consultant who creates presentations for senior execs in large businesses it is not a tool I would even consider due to lack of compatibility with the corporate players, for example, like it or not, your presentation will be in MS PowerPoint if you want to share them. It’s the way it is.
Has the free option which I had a play with, and a £100 annual subscription, might have been in USD, can’t remember.
i can see that affinity knowledge could bolster their offering, but integrating desktop apps with a in the main cloud cased eco system will be a significant challenge I would have thought. Desktop and mobile versions exist, but these seem to mirror the web experience from what little I’ve seen.
I guess my biggest concern here would be Canva pushing for the Affinity developers to enable the Affinity suite into the Canva tech stack, potentially diluting development in Affinity, it being a small company, moving to a subscription model and dilution of the Affinity brand
Could be good, equally could kill off Affinity, depends on what the new owners want. I guess we will see.
If Ashley Hewson moves on quickly that will be bad for Affinity and a good indicator for where things are going
As a consultant who creates presentations for senior execs in large businesses it is not a tool I would even consider due to lack of compatibility with the corporate players, for example, like it or not, your presentation will be in MS PowerPoint if you want to share them. It’s the way it is.
Has the free option which I had a play with, and a £100 annual subscription, might have been in USD, can’t remember.
i can see that affinity knowledge could bolster their offering, but integrating desktop apps with a in the main cloud cased eco system will be a significant challenge I would have thought. Desktop and mobile versions exist, but these seem to mirror the web experience from what little I’ve seen.
I guess my biggest concern here would be Canva pushing for the Affinity developers to enable the Affinity suite into the Canva tech stack, potentially diluting development in Affinity, it being a small company, moving to a subscription model and dilution of the Affinity brand
Could be good, equally could kill off Affinity, depends on what the new owners want. I guess we will see.
If Ashley Hewson moves on quickly that will be bad for Affinity and a good indicator for where things are going
Digital Nigel
Forum Pro
From
Two Nottingham-based entrepreneurs have banked more than £100 million after they sold their graphic design software company to Canva, of Australia, in a deal worth “several hundred million pounds”.
Gary Bates, 54, and Jim Bryce, 59, owned about two thirds of Serif, which is known for its Affinity range of software for professional designers.
They acquired the lossmaking business for less than £1 million in 2001 as part of a management buyout from a now-defunct American company [Allegra/Vizacom]. Bates could see they had bagged a bargain, telling The Nottingham Evening Post in August that year: “Although the business posted losses last year, there was an underlying profitability about the company.”
Ashley Hewson, the chief executive of Serif, said the deal had “come out of the blue”
The pair subsequently acquired all the remaining shares in a second buyout in 2004, helped by funding from Bank of Scotland, before selling a 10 per cent stake to Ashley Hewson, the present chief executive, and other employees in 2008. Hewson, 46, had joined the company in 1998 in telesales, after dropping out of university.
More than three million professional designers use Affinity, which helped Serif to achieve pre-tax profits of £16 million in 2022, on sales of £31 million. Those bumper profits enabled its shareholders to receive £43.4 million in dividends between 2022 and April 2023.
Hewson said the deal with Canva, which was said in January to be valued at $26 billion, had come “out of the blue”. Bates and Bryce are leaving the business completely, while he and Serif’s 93-strong team are joining Canva.
The move is a departure for Canva, which provides easy-to-use design templates and tools for untrained designers, with 175 million people using its software each month. It was co-founded in 2013 by Melanie Perkins, 36, its chief executive, her husband Cliff Obrecht, 38, and Cameron Adams, 44, a former Google engineer.
Obrecht said in an interview with Bloomberg that the deal for Serif had been funded with a mix of cash and stock and that it valued Serif at “several hundred million pounds”. Obrecht and Perkins own about 30 per cent of Canva. The profitable company reported annual recurring revenues of more than $2 billion in December.
Two Nottingham-based entrepreneurs have banked more than £100 million after they sold their graphic design software company to Canva, of Australia, in a deal worth “several hundred million pounds”.
Gary Bates, 54, and Jim Bryce, 59, owned about two thirds of Serif, which is known for its Affinity range of software for professional designers.
They acquired the lossmaking business for less than £1 million in 2001 as part of a management buyout from a now-defunct American company [Allegra/Vizacom]. Bates could see they had bagged a bargain, telling The Nottingham Evening Post in August that year: “Although the business posted losses last year, there was an underlying profitability about the company.”
Ashley Hewson, the chief executive of Serif, said the deal had “come out of the blue”
The pair subsequently acquired all the remaining shares in a second buyout in 2004, helped by funding from Bank of Scotland, before selling a 10 per cent stake to Ashley Hewson, the present chief executive, and other employees in 2008. Hewson, 46, had joined the company in 1998 in telesales, after dropping out of university.
More than three million professional designers use Affinity, which helped Serif to achieve pre-tax profits of £16 million in 2022, on sales of £31 million. Those bumper profits enabled its shareholders to receive £43.4 million in dividends between 2022 and April 2023.
Hewson said the deal with Canva, which was said in January to be valued at $26 billion, had come “out of the blue”. Bates and Bryce are leaving the business completely, while he and Serif’s 93-strong team are joining Canva.
The move is a departure for Canva, which provides easy-to-use design templates and tools for untrained designers, with 175 million people using its software each month. It was co-founded in 2013 by Melanie Perkins, 36, its chief executive, her husband Cliff Obrecht, 38, and Cameron Adams, 44, a former Google engineer.
Obrecht said in an interview with Bloomberg that the deal for Serif had been funded with a mix of cash and stock and that it valued Serif at “several hundred million pounds”. Obrecht and Perkins own about 30 per cent of Canva. The profitable company reported annual recurring revenues of more than $2 billion in December.
Digital Nigel
Forum Pro
Are you? Your statements seem to indicate the opposite.
No it's not. A CEO who takes some or all of the payment in stock is much more likely to stay on with the company than one who takes the full payment in immediate cash. The stock in the acquiring company may ultimately be worth much more than the cash on offer today.
I'm curious why you think a private company can't partly fund acquisitions with stock? This one certainly did.
The deal, which is a mix of cash and stock, is valued at “several hundred million pounds,” Canva co-founder and Chief Operating Officer Cliff Obrecht said in an interview with Bloomberg on Monday.
Night Pixel
Senior Member
The team just released this statement:
If they ever announce a change we need to remind them of their pledge.
Text of email from Affinty/Canva team:
===============================================================
START OF TEXT
===============================================================
Earlier this week we shared the news that Affinity had been acquired by Canva. As the dust settles on the announcement, we wanted to say more about our future and our commitment to the Affinity community.
Since our inception, both of our companies have shared the same mission and vision. We were both founded with the belief that design shouldn’t be limited to those who can afford complex software. Our goal has been to make the highest quality design tools available to the largest number of people with fair, transparent and affordable pricing at our core. By joining forces, we’re looking forward to accelerating this shared vision.
Above all, together, we’re committed to continuing and amplifying Affinity’s position as the highest-quality professional-grade design suite on the market, while continuing to empower millions of designers to unlock their creativity and achieve their goals.
1. We are committed to fair, transparent and affordable pricing, including the perpetual licenses that have made Affinity special.
We share a commitment to making design fairer and more accessible. For Canva, this has meant making our core product available for free to millions of people across the globe, and for Affinity, this has meant a fairly priced perpetual license model. We know this model has been a key part of the Affinity offering and we are committed to continue to offer perpetual licenses in the future.
If we do offer a subscription, it will only ever be as an option alongside the perpetual model, for those who prefer it. This fits with enabling Canva users to start adopting Affinity. It could also allow us to offer Affinity users a way to scale their workflows using Canva as a platform to share and collaborate on their Affinity assets, if they choose to.
2. We will double down on expanding Affinity’s products through continued investment in Affinity as a standalone product suite.
We believe Affinity is the highest-quality professional-grade design suite on the market. It’s non-destructive, super fast, and easy to use. As such, we want to reassure you that it isn’t going anywhere.
In fact, we’re committed to using our shared resources to continue expanding Affinity’s products through further investment in Affinity as a standalone product suite. We’re looking forward to accelerating the rollout of highly requested features such as variable font support, blend and width tools, auto object selection, multi-page spreads, ePub export and much more.
These additions will further cement Affinity as the best advanced design suite on the market and will be released over the coming year as free updates to V2.
3. We will provide Affinity free for schools & NFPs.
Canva, which has pledged 30% of its value as a company towards doing good in the world through its two-step plan, offers premium plans at no cost to schools and NFPs all over the world. More than 60 million students and teachers, plus 600,000 charities and registered nonprofits, benefit from this each month.
We’re excited to extend this programme to include free access for schools and nonprofits to Designer, Photo and Publisher. These professional-grade tools will add enormous value to this free offering, helping millions of students to master the craft of design, and empowering mission driven organisations to amplify their voices and maximize their impact.
We’ll share more details on this in the coming months, including what it means for our education and NFP customers that already use Affinity.
4. We are committed to listening and being led by the design community at every step in this journey.
Affinity and Canva were both founded on the basis that their respective communities – of expert and non-expert designers – deserved better. The tools available were overly complex, overly priced, or both. We know designers deserve better. They deserve the highest quality tools to serve their needs and they deserve to be treated fairly.
We also believe the design community also knows best what it needs. As such, we are committed to shaping our products based on your ideas, your feedback and your needs. To kick things off, we’d love to learn more about what you’d like to see as we embark on this next chapter of our journey. What would you like to see in Affinity? What features have you been dreaming of? What would you love to achieve? We’d love to hear from you here.
Thank you to everyone who has been an integral part of the journey so far. We’re excited for the future and can’t wait to see what we can build together.
With gratitude and excitement,
The Affinity and Canva Teams
================================================================
END OF TEXT
================================================================
--
**** REDACTED ****
If they ever announce a change we need to remind them of their pledge.
Text of email from Affinty/Canva team:
===============================================================
START OF TEXT
===============================================================
Earlier this week we shared the news that Affinity had been acquired by Canva. As the dust settles on the announcement, we wanted to say more about our future and our commitment to the Affinity community.
Since our inception, both of our companies have shared the same mission and vision. We were both founded with the belief that design shouldn’t be limited to those who can afford complex software. Our goal has been to make the highest quality design tools available to the largest number of people with fair, transparent and affordable pricing at our core. By joining forces, we’re looking forward to accelerating this shared vision.
Above all, together, we’re committed to continuing and amplifying Affinity’s position as the highest-quality professional-grade design suite on the market, while continuing to empower millions of designers to unlock their creativity and achieve their goals.
1. We are committed to fair, transparent and affordable pricing, including the perpetual licenses that have made Affinity special.
We share a commitment to making design fairer and more accessible. For Canva, this has meant making our core product available for free to millions of people across the globe, and for Affinity, this has meant a fairly priced perpetual license model. We know this model has been a key part of the Affinity offering and we are committed to continue to offer perpetual licenses in the future.
If we do offer a subscription, it will only ever be as an option alongside the perpetual model, for those who prefer it. This fits with enabling Canva users to start adopting Affinity. It could also allow us to offer Affinity users a way to scale their workflows using Canva as a platform to share and collaborate on their Affinity assets, if they choose to.
2. We will double down on expanding Affinity’s products through continued investment in Affinity as a standalone product suite.
We believe Affinity is the highest-quality professional-grade design suite on the market. It’s non-destructive, super fast, and easy to use. As such, we want to reassure you that it isn’t going anywhere.
In fact, we’re committed to using our shared resources to continue expanding Affinity’s products through further investment in Affinity as a standalone product suite. We’re looking forward to accelerating the rollout of highly requested features such as variable font support, blend and width tools, auto object selection, multi-page spreads, ePub export and much more.
These additions will further cement Affinity as the best advanced design suite on the market and will be released over the coming year as free updates to V2.
3. We will provide Affinity free for schools & NFPs.
Canva, which has pledged 30% of its value as a company towards doing good in the world through its two-step plan, offers premium plans at no cost to schools and NFPs all over the world. More than 60 million students and teachers, plus 600,000 charities and registered nonprofits, benefit from this each month.
We’re excited to extend this programme to include free access for schools and nonprofits to Designer, Photo and Publisher. These professional-grade tools will add enormous value to this free offering, helping millions of students to master the craft of design, and empowering mission driven organisations to amplify their voices and maximize their impact.
We’ll share more details on this in the coming months, including what it means for our education and NFP customers that already use Affinity.
4. We are committed to listening and being led by the design community at every step in this journey.
Affinity and Canva were both founded on the basis that their respective communities – of expert and non-expert designers – deserved better. The tools available were overly complex, overly priced, or both. We know designers deserve better. They deserve the highest quality tools to serve their needs and they deserve to be treated fairly.
We also believe the design community also knows best what it needs. As such, we are committed to shaping our products based on your ideas, your feedback and your needs. To kick things off, we’d love to learn more about what you’d like to see as we embark on this next chapter of our journey. What would you like to see in Affinity? What features have you been dreaming of? What would you love to achieve? We’d love to hear from you here.
Thank you to everyone who has been an integral part of the journey so far. We’re excited for the future and can’t wait to see what we can build together.
With gratitude and excitement,
The Affinity and Canva Teams
================================================================
END OF TEXT
================================================================
--
**** REDACTED ****
Last edited:
tbcass
Forum Pro
That's what they all say until they change everything.
tbcass
Forum Pro
The were possibly going broke and needed a cash bailout.
IanYorke
Veteran Member
From a brief look at Canva it looks like a good match. Canva seem to focus on AI aided design for non technical people while Affinity is a direct competitor to Adobe in the technical design space.
The combination is certainly a much stronger competitor to Adobe and Canva have committed to maintaining the perpetual Affinity license which does make sense.
Giving Affinity away for free to schools and non profit can only increase visibility and Affinity on their own couldn't have done this.
Ian
AndyGordon
Senior Member
Nope, quite a cash rich company with a remarkable profit to turnover ratio
Hopefully they stick to that. I don't know anything about Canva but someone stated all their products were subscription. There have been a lot of promises made by many companies over the years. Sometimes you need to make changes to keep up with the times and competition to survive.
Adobe also said LR would never go subscription. However they did keep their promise of - if enough people sign up there would no price increases. Going on 8 years for the Photo Plan. I don't count the All Apps plan that went up $3 per month. Anyone who can afford that plan is likely earning and will do the universal thing. Pass that on to their customers.
If they ever announce a change we need to remind them of their pledge.
Text of email from Affinty/Canva team:
===============================================================
START OF TEXT
===============================================================
Earlier this week we shared the news that Affinity had been acquired by Canva. As the dust settles on the announcement, we wanted to say more about our future and our commitment to the Affinity community.
Since our inception, both of our companies have shared the same mission and vision. We were both founded with the belief that design shouldn’t be limited to those who can afford complex software. Our goal has been to make the highest quality design tools available to the largest number of people with fair, transparent and affordable pricing at our core. By joining forces, we’re looking forward to accelerating this shared vision.
Above all, together, we’re committed to continuing and amplifying Affinity’s position as the highest-quality professional-grade design suite on the market, while continuing to empower millions of designers to unlock their creativity and achieve their goals.
1. We are committed to fair, transparent and affordable pricing, including the perpetual licenses that have made Affinity special.
We share a commitment to making design fairer and more accessible. For Canva, this has meant making our core product available for free to millions of people across the globe, and for Affinity, this has meant a fairly priced perpetual license model. We know this model has been a key part of the Affinity offering and we are committed to continue to offer perpetual licenses in the future.
If we do offer a subscription, it will only ever be as an option alongside the perpetual model, for those who prefer it. This fits with enabling Canva users to start adopting Affinity. It could also allow us to offer Affinity users a way to scale their workflows using Canva as a platform to share and collaborate on their Affinity assets, if they choose to.
2. We will double down on expanding Affinity’s products through continued investment in Affinity as a standalone product suite.
We believe Affinity is the highest-quality professional-grade design suite on the market. It’s non-destructive, super fast, and easy to use. As such, we want to reassure you that it isn’t going anywhere.
In fact, we’re committed to using our shared resources to continue expanding Affinity’s products through further investment in Affinity as a standalone product suite. We’re looking forward to accelerating the rollout of highly requested features such as variable font support, blend and width tools, auto object selection, multi-page spreads, ePub export and much more.
These additions will further cement Affinity as the best advanced design suite on the market and will be released over the coming year as free updates to V2.
3. We will provide Affinity free for schools & NFPs.
Canva, which has pledged 30% of its value as a company towards doing good in the world through its two-step plan, offers premium plans at no cost to schools and NFPs all over the world. More than 60 million students and teachers, plus 600,000 charities and registered nonprofits, benefit from this each month.
We’re excited to extend this programme to include free access for schools and nonprofits to Designer, Photo and Publisher. These professional-grade tools will add enormous value to this free offering, helping millions of students to master the craft of design, and empowering mission driven organisations to amplify their voices and maximize their impact.
We’ll share more details on this in the coming months, including what it means for our education and NFP customers that already use Affinity.
4. We are committed to listening and being led by the design community at every step in this journey.
Affinity and Canva were both founded on the basis that their respective communities – of expert and non-expert designers – deserved better. The tools available were overly complex, overly priced, or both. We know designers deserve better. They deserve the highest quality tools to serve their needs and they deserve to be treated fairly.
We also believe the design community also knows best what it needs. As such, we are committed to shaping our products based on your ideas, your feedback and your needs. To kick things off, we’d love to learn more about what you’d like to see as we embark on this next chapter of our journey. What would you like to see in Affinity? What features have you been dreaming of? What would you love to achieve? We’d love to hear from you here.
Thank you to everyone who has been an integral part of the journey so far. We’re excited for the future and can’t wait to see what we can build together.
With gratitude and excitement,
The Affinity and Canva Teams
================================================================
END OF TEXT
================================================================
--
You just need to keep the forests wet
Digital Nigel
Forum Pro
Isn't this something that Adobe has long done? It helped make its products the industry standard.
Digital Nigel
Forum Pro
Exactly the opposite: Serif was embarrassingly profitable (profits were 53% of gross revenue) and growing well. It had very healthy amounts of cash in the bank.
Len Philpot
Leading Member
Absolutely.
I'm in no way impugning Ash's integrity nor character (and in his place could any of us guarantee we'd not accept a trainload of money if offered?) but the simple fact is, he's now just another employee who will live or die by whatever his bosses decide. And those bosses are the bean-counters behind Canva.
Len Philpot
Leading Member
It would indeed be nice if the two entities would remain separate and allowed to independently develop, but I'm afraid what it means is Affinity will just be dumbed down rather than enhanced (the usual end result), further opening the gap between it and Adobe.
If a subscription ever becomes (practically) necessary, I can't imagine any reason to stay with Affinity Photo. As it is now, Photo is a large enough percentage of Photoshop's capabilities, that when combined with its reasonably-priced permanent license it precludes any compelling reason to go to Adobe. But if a Photo subscription becomes necessary that advantage instantly evaporates. It doesn't make Photo weaker, but there's no logical reason to forego Photoshop's additional strengths if they're both a subscription.
I sincerely hope I'm wrong.
Night Pixel
Senior Member
Don't you think Canva management knows and understands this? The major competitive advantage Affinity apps Photo/Publisher/Desinger have over the equivalent Adobe apps is price and licensing. They do not win for total functionality.
People who run companies in a competitve environment are keenly aware of the market they are in.
--
**** REDACTED ****
Last edited:
tbcass
Forum Pro
Then whoever owned the company was looking for a huge amount of cash that would allow them to retire rich and live the good life. That is exactly what Steve Wozniak of Apple and Paul Allen of Microsoft did so they could carry on with other endeavors. Most people don't realize that they were the real technical brains behind Apple and Microsoft with Jobs and Gates being the ones with business acumen. It's also what I would do in that position.
Similar threads
Keyboard shortcuts
- f
- Forum