Cautious Optimism

Cautious Optimism

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Cautious Optimism
Cautious Optimism
Tech earnings kick off as Canva works to make M&A great again

Tech earnings kick off as Canva works to make M&A great again

Alex Wilhelm
Jul 30, 2024
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Cautious Optimism
Cautious Optimism
Tech earnings kick off as Canva works to make M&A great again
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  • 📈 Trending Up: Swiggy-backed Rapido … Meta’s open-source AI chops … Apple Intelligence … AI scrapers’ ability to get in trouble … custom chatbots … PayPal shares post-earnings … FAYE … solar power … China’s factories … olympic doping …

  • 📉 Trending Down: US home insurance profits … cement production in China … Anthropic’s Google relationship … the FT’s ownership …

  • 🤔 What Else?

    • SaaS sales metrics are getting slowly, holistically worse: New data from RepVue indicates that SaaS sales speed, deal size, and rep comp are all headed in the wrong direction at once. Not good.

    • It’s a big earnings day: Today we’re hearing from Microsoft, AMD, Arista Networks, PayPal (see above), Electronic Arts, Pinterest, Match, Yandex, Blackbaud, Freshworks, Lemonade, and A10 networks.

  • 📊 Startup of the Day: Type One Energy. TechCrunch’s Tim De Chant has a great piece out on Type One, which just raised $53.5 million. The company is working on commercializing fusion power, focusing on using stellarators for plasma confinement.

    • If we can get to net-positive fusion energy at scale, the planet will be greatly helped.

    • This means a global implementation of fusion energy. Says Type One CEO Christofer Mowry when discussing coal usage in China, “If we don’t find a way to decarbonize the region, we might as well fold up the tent and go home.”

    • High-risk dollars into an industry that is working on both tech and commercial risk at once? You love to see it!

Via Leonardo.Ai marketing materials. Cropped.

Canva snags Leonardo.Ai

Given the present IPO dearth, startup M&A is taking on an outsized portion of mantle when it comes to generating cash returns for venture capitalists. Thus, every startup M&A transaction is of note and worth examining.

Especially when Canva is involved. The Australian design company was valued at $40 billion back in 2021 when it raised a $200 million Series F. That made it one of the most valuable private-market technology companies in the world. More recently, the company’s valuation settled at $26 billion. Sure, falling valuations are never great, but a $26 billion valuation in 2024 actually says a lot more than a $40 billion price tag a few years back. [Update: Canva reached out to let CO know that we got the numbers wrong here. $40B was in AU$, so the $26B in USD is, in fact, the same figure.]

So we care about Canva. We should care about Leonardo.Ai, too, because it’s built a real business in the AI game and found an exit to a giant that, if we’re reading the tea leaves correctly, was executed at an attractive price.

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