Canva’s $60bn Problem and eBay’s Corporate Terrorism Scandal

0:00I'm Adam Schwab. I'm Adir Shiffman. And this is The Contrarians with Adam and Adir.

0:09And we're back, episode 228. We know our listeners love these business episodes on a Saturday, so we're giving you another business episode. And we've got a couple of big stories, actually. So you may have seen last week's Street Talk report that Canberra, the Australian private market darling, has posted 30 % revenue growth of the year up to May in a private investor update that Streetalk claimed will help justify its hefty Australian US$60 billion, US$42 billion valuation in the face of AI-created correction. Canva apparently told investors that revenue has grown by 30 % in the 12 months to May.

0:43The company reaffirmed its US$42 billion valuation last month with the entry of a new investor at Robinhood Ventures Fund, also has US$1 billion in cash reserves. At the end of 2025, Canva publicly shared that AIR, which is the business that expects from annualised recurring revenue was US$4 billion, which makes its revenue probably about US$3.5. While Street Talk fawned over the result, it was actually a pretty disappointing result for Australia's most valuable private tech company. And while real data is kind of tricky to obtain for Canva because it tends to release its numbers about 18 months after they happen, it appears Canva was growing at 40 % in 2023 and potentially 45 % in 2024.

1:23So 30 % growth rate is a huge deceleration for the Sydney-based giant. Just as a quick couple of comparisons for you, dear, Robert's Iron Fern, Figma, that we've talked about at length, announced they grew by 46 % in the March quarter, and that went up 40 % in the December quarter, so significantly higher growth. Figma, despite growing fast, trades on a revenue multiple of 9x based on recent financials. Canberra, and it's a bit hard to work out Canberra's numbers as much, but my calculations saw it trading on a revenue multiple of about 10 to 12, so significantly higher than Figma, despite having...

1:55What do you say 10 to 12 if it's 60 bill USD? 60 bill Australian. Oh, is it? Okay. 42 USD. Okay. Meta, of course, which has a similar growth rate to Canva. I think Meta grew 28 % last quarter. Trains on 7x revenue multiple. Much bigger base. Much bigger base, and highly profitable. And highly profitable. And Canva, whilst claiming to be profitable, don't make real money as yet. Figma is sort of in a similar boat, although Figma's closer to profitability. So recently Canva was growing at 60%, and then it gradually slowed down. I haven't seen it at 60. Yeah. Like three years ago or something. And so the way I think about it is if you have like a 100-meter race, the difference between 30 % and 60 % is like Usain Bolt versus a photon.

2:35That would be my difference, right? Or Superman, right? Like one is superhuman and one is a very fast human. 30 % is not amazing. It's fast. It's okay. It's fast at four billion of revenue. That's what I expect to us to grow at, not one of Australia's most glamorous tech companies. Presumably you're not doing$4 billion USD of software revenue. So that's a high base, okay? Yeah, but these guys are meant to have a limitless TAM or a massive TAM. They're not even close to touching the sides. But if I look at Meta, if Meta was growing at 28%, and they've got problems, Meta, but like... Well, their problems are self-inflicted stupidity.

3:09And they can get out of their problems, right? Yeah, they'll just shut this AI. So what's their revenue, Meta? Like, I don't even know what order of magnitude it is. 180 billion rings a bell. I'll get my talk. But it's like in the$100 plus billion revenue. Google, I think, has got the highest now at$400. I think that has significant amount. And so if you've got this kind of revenue with a 28 % growth rate and throwing off cash, then maybe if I look at Canva and they've got four bill of revenue but they're growing at 60%. Three and a half. Or maybe four now. Yeah, but they're growing at 60%. I'm like, well, that's unbelievable.

3:3960 % amazing. That's unbelievable. Maybe I can see what the valuation is all about. Yeah, totally. But 30 % with an AI headwind. The biggest worry is it's dropped massively. If it was 30, 30, 30, 30, 60, 45, 40, 30, it's pretty ugly. They were never realistically going to maintain that growth rate at much higher bases. Anthropic's gone 2x, 3x, 10x, 10x, 10x. And they were competing with them. And that is why Anthropic is a superhuman business and Canva has come down to just being a very fast human business. I think a solid business and a really good Australian business, but not anywhere near, I think, what anybody thought they were.

4:23Well, you know what you would do with US$4 billion of revenue and a 30 % growth rate? You would make a billion dollars of profit. Yep. And I think that they're getting into the Atlassian world now, which is… I don't think they've ever made money in Pederst. Atlassian at least once made money. Canberra's never made money. What I mean is they're getting into the world that we advocate for Atlassian, which they seem to have embraced, which is make some money. And so I think that like at$4 billion US, they've got a chance to make real money. Let's say they made a bill of profit. What would you value them at?

4:55Let's say they were four bill, growing at 30 % making a bill. What would you value them at? So Cam was basically, just by the way, Cam was basically a break even. It makes a 20 million max net. So what would you, tell me what valuation you give them. Four bill top line, growing at 30%. I think that's a good quote. Very good. And this is net profit you're talking about or EBITDA, real profit. so what so you're looking at pa multiple 30 growth oh high quality revenue 60 times multiple that would be the upper end and so you would say that's a that is a 50 percent higher valuation than their current value the current valuation is that ironically is what the reason 60 billion australian oh it's about us yeah us so they're in a much better position than atlassian was in because if they pivot to profitability, they can actually increase their valuation potentially.

5:45And so that is why I would heavily advocate. It should be they can maintain growth. Yeah, well, I think this is their biggest... This is the question we have, the debate we have. Their biggest challenge is, can they really win the AI war? They think they can. Well, they're becoming this sort of quasi, not a frontier model, they're becoming this quasi sort of second tier, just behind the front. I presume they're using the frontier models or with Leonardo, they kind of got their own thing there. but like Figma, look at this versus Figma. They won't take my advice by the way. Like this business will not pivot to profitability.

6:15Well they are, in Venice then, they make 25, unless they don't make any. But you know what I mean. They're a little bit profitable. I'm saying pivot to profitability, 25 % margins, profit margins. My question is, I don't think they can without hitting the growth rate too much. Why do you say that? Because I think their costs are unconnected to their growth. You can't keep growing. I disagree with that. You're assuming they send zero marketing then. that's the only way you can justify this I just assume they don't spend$4 billion on market I'm not saying$4 billion but I'm saying they spend a big chunk they're not huge staff yeah yeah their costs are almost entirely people they haven't got that many staff whatever they've got let's look at Figma it's showing up$4 billion the question is let's look at the current valuation or current scenario let's forget this make believe billion dollar profit which may or may not happen well it won't happen just to be clear I don't disagree so Figma is actually shooting the lights out everybody's questioning Figma's dead because Claude's going to kill it.

7:06Figma grew up 46 % and I think Figma is, if not profitable, pretty close to profitability. I thought Figma was less exposed personally. Oh, I thought you thought they were more exposed. Because I think the thing with Figma is they're very much a B2B product. But so is Claude. Claude is, but if you look at what Claude's going after, so the code, so maybe you could write it yourself. Maybe you used Claude design and you loved it. Yeah, so that front end of Figma I think has got problems. Yeah. But they've got a whole lot of other stuff that I think is survivable. Well, clearly you're right because I grew up 40, and the difference between Figma and Canva is Figma's growth is accelerating.

7:39They went from 30 to 46, 40 to 46, and Canva's gone the other way. So I don't know if Figma's taking Canva market share as well, but so Figma's on, if you look at Figma's numbers, they're only worth 13 billion, and they've got, obviously a smaller business than Canva is. I think they've got just over a billion in revenue, not AR revenue, so call it 1.1 or whatever. So they're trading on, I think what is a nine times multiple, just give or take nine times multiple. that's not too bad. They're growing really quickly. So you're going to get a much higher mass-bust and they're accelerating the growth rate.

8:10So if Figma's nine times multiple, it's pretty hard to justify Canva being much more than five times sales multiple, I would have thought. I agree. But if I'm open AI or even anthropic, I would rather buy Canva for – I'm talking USD – I'd rather buy Canva for 50 than Figma for 20. But forget purchase for now. Well, I think that's the exit. potentially but let's just forget you believe the ipo story forget the exit for a second well that's all i think they should be focused on we'll get to the exit next but just the current valuation yeah if they if they if they want a five times multiple and even assuming their revenue's grown a bit since last year let's say their revenues now being really generous so their revenue now is five billion well it's probably not quite there it's probably more 4.5 but say it's got say it's five five times five is 25 billion us the actual last one's 42 billion so that's a 40 % drop off.

9:05I agree with you. This is every big VC in Australia is hitched their wagon to this and will have to take massive downticks. I know, but a lot of those VCs have invested at like a$4 valuation so they're still up, but their later funds haven't. Yeah. Their later funds will take a hit. Yeah. Yeah, I think this is what I'm saying to you. I've said this for what, six months? Canva's entire focus right now should be selling this business to someone and taking as much of it in cash as humanly possible. Are Anthropic or Open Up? They should go talk to Tim Doyle and say, how do you get a good sale here?

9:41And like... Well, Tim's sale was one of the greats of all time, but he also had a desperate buyer who really needed them. Well, I don't know if you've noticed what's going on. I'm not sure that I or Anthropic are desperate to buy a camera. Oh, I totally disagree with that. Really? Yeah, this is like a fight to the death with minimal clear differentiation between models. and like what they need is customers and users. But OpenAI has heaps of customers. It hasn't helped them. Well, it didn't help them. Now, both the – like Anthropic pivoted to – well, Anthropic went to B2B earlier, maybe because they knew they couldn't compete with Gemini and OpenAI and have done really well in B2B.

10:16I'm not sure Canva's got a big enough B2B business to justify somebody wanting to buy it. They've got a great B2C business. So Gemini's – They're such a – OpenAI's got heaps of customers. They don't need them. may be Anthropic but Anthropic don't even want consumer business so I don't think any of these three actually want to buy them yeah I think it's an open no I think if I'm open AI what I think is this I'm worth 100 bill I'm not worth 100 bill so well open AI I think they're worth a trillion oh sorry a trillion so like I'm worth a trillion dollars well I'm not worth a trillion dollars I know I'm not like even Sam Oldman like he's got to realise he's not worth whatever and so this thing I could probably get it for 50 USD and if I pay cash I can probably definitely take that out.

10:57I think you get it for less than 50. It was last valued at 42 USD. I know, but I'm just saying, what would they be insane not to take as a cash price? If I was Canva and got offered 35, I'd take it in a heartbeat. I know, but you're not inside having Canva juice pump through your veins and you're a true believer, okay? So what I'm saying to you is, I think even if you got the Canva juice, they're pretty rational. I'll make it 50. It's irrelevant. It's irrelevant. So they get 50 bill, they dilute 5%, This is an OpenAI. Crazy valuation. Canva is one of the best known consumer brands in the world in software.

11:33They are. And so OpenAI is playing a game called, like, we need to win this space and it's very competitive. I'm not sure. I would buy them. I would buy them. But OpenAI has customers. Consumers aren't there. What they want. They just can't monetize these useless consumers. Well, what they want. Who cost them more than they, like, it cost them getting 200 bucks for revenue. It cost them 1 ,000. That's not the kind of customer I want. I'm not just talking about customers. What they want is differentiation in a market that's becoming increasingly commoditised and they're having difficulty with the commoditisation in the B2B space.

12:04And topics show you can design cloud code if you want to. It probably wouldn't have taken that long to design a code version and their own version of Canva. Everyone knows Canva. They go and say, come and use OpenAI and it includes Canva. Everyone knew Thomas Cook in the UK as travel agent. It didn't stop them going bus. I don't think everybody knows is necessarily a value generator for an acquirer. I think, personally, like we can agree or disagree on this, I think OpenAI buying Canva would be a rocket underneath them, both in terms of investor perception, but also in terms of just the general market saying, I don't really know what the difference is between Claude and ChatGPT.

12:44I mean, ChatGPT's still got probably better brand recognition. I don't know. And all of a sudden, you've got Canva layered in there. I think it would change the perception of OpenAI as being once again at the cutting edge. I think that's completely wrong. I don't think they'd get any benefit from it at all. If I'm Melon Cliff, I'd sell to OpenAI in a heartbeat. They're going to be wrong. For cash. Of course for cash. You don't want that stock, right? Maybe you can hedge it somehow. You can somehow call it. I don't know. Yeah, you probably could hedge it. There's a Mark Cuban special. Like your boy Mark Cuban, yeah, who just hedged any number otherwise.

13:14Hedged the Yahoo stock. ROI, radio and internet. Yeah. So, like, they should be trying to sell us. Like, I understand why they push back the IPO because you don't want an IPO in this market. Okay, we found something we agree on, that the primary focus of Canva right now should be the exit. I think exit and how do you make money, as much money as possible in the shortest possible time. That gives them a chance to maintain optionality. But this is, by far, Australia's darling, but they're less darling than I think we all thought they were. This 30 % growth rate is a real red flag. Slower than expected.

13:45It's like the red – you know when the fire – there's a fire and the alarm's going off in the fire. But the door hasn't opened yet so that you see the alarm going off. You can't park your car in front of it but you know the fire engine's about to come out. It feels like the fire engine's about to come out. Well, the advantage they have is that there is no door to open because they're private and they're not traded. Yeah. So I think that that – it'll be an interesting story. I do want to just reiterate though, 30 % growth. I'd be over the moon with Catapult growing at 30%. Yeah, it's still a great business and a great story.

14:13but I think the problem is when you've set expectations of 40 % and you're now at 30 % and your vowel's on 40, that's the problem. And if you say we're going to be competitive in the AI landscape and everyone who's competitive in the AI landscape is growing 1 ,000 % and you've gone from 40 to 30, it's problematic for that story. They're super unlikely in a sense. They have these new competitors in Anthropik and GPT come from nowhere and they've got competitor with Microsoft now competing. So you've got always like massive business. They had forever to exit. How much time do you need to say – the thing is this.

14:49Everybody thinks they're Oracle. I mean, Oracle's got some problems now as well. Everybody thinks they're Microsoft. Everybody thinks they're Meta. I'm going to hold this business for the next 50 years. Yeah, they came a bit for another. I've got news. You're not. Yeah, but you're growing at 45%. You're flying. You've got great market power. Suddenly, these guys – Build, sell. They were pretty unlucky to have these incredible businesses, really, like they're valuable or not, for Vanthropic and Open Arms is another question. but they're incredible businesses. And then you've got Microsoft, the Goliath.

15:16So they've just had, they've been really unlucky, Canva, I reckon. I'm just going to say this with a made up number, but you'll get the gist. Every day, 5 million people in the world are unlucky. So you just need to decide, when's your day coming? Because it's not never. And so when you've got, what, 15 years that you could have sold a business for an absolute bucket of money? Oh, they've only really had, in terms of real valuation skyrocketing, it's probably like 2008, 17, 18. they only started in 2011 seven years so yeah seven, eight years they had time but it's not like it's been COVID how was that for them?

15:48good pretty good they had plenty of time to sell this business in hindsight probably was the time sell get your money and if you want to give it all the way to charity good on you go do that but like it's going to be a lot easier to give money away to charity if you've got money to give away

16:13I'm going to pivot to a very different story, and this is the absolutely sickening story for the tech sector, which of course happened at eBay. Have you been following this debacle? I hate this story. Yeah, we hate everything about it. And the New York Times gave a great summary of it. So back in 2019... My daughter, by the way, she's been using eBay to sell. She's got a little eBay business. Very impressive. And then she tried Vinted, like literally yesterday, and something that did not move on eBay for weeks sold on Vinted within one hour. Yeah, two items. This is what I've been using. I used to like Facebook Marketplace just for giving away stuff or selling something really cheap.

16:48I put some stuff on, like some office desks on Marketplace and I used to get really good inquiry, get rid of it in like 10 minutes. I've had like 100, it feels like bots or shit inquiries. Facebook Marketplace is completely insuredified. I found a Facebook Marketplace impossible, almost impossible to use as a buyer, by the way. I used to love it, but it's now hopeless. As a buyer, I've had a few good experiences, but as a seller, it's gone from great to terrible. Well, Vinted seems to be taking over the market. Okay, interesting. So, 2019, eBay executives had an issue with a tiny news site and message board for eBay sellers.

17:21It was called eCommerce Bites. It was run by a slightly older couple, Ina and David Steiner in suburban Massachusetts. I think they were in their 50s or 60s at the time. What they did to anger eBay was noting that the CEO, a guy called Devin Wenig earned 150 times the average worker which is hardly a great powerful statement. Everybody knows this. Well, that probably has only increased substantially since that was written, right? But rather than buy the site or threaten legal action, eBay employees in its so-called security team started literally terrorising this poor couple. The employees sent Steiner's offensive and suggestive items, handed them on social media and stalked them at home including trying to install GPS tracking devices on their car.

18:06This is actually way worse than it sounds. They also sent them a funeral wreath, a copy of Grief Diary Surviving Loss of a Spouse. Bear in mind, they don't know who was sending them this stuff. They thought there was some guy trying to kill them. In fact, they would certainly not have thought it was eBay. No, and they even sent them a bloody pig mask worn by the killers in the Saw movie. This is just horrific. It's literally corporate terrorism that was happening here, paid for by eBay shareholders, no less. In 2020, and they found out, I think they happened to catch the number plate of a car, and they traced it back to eBay.

18:34But in 2020, federal prosecutors in Massachusetts incited seven former eBay executives, current at the time, now former eBay employees, including head of security James Bohr, who seems like the absolute worst bloke on earth, on charges of cyber stalking. Disgraced former eBay workers pleaded guilty in receiving sentences as much as, I think almost five years jail, which is probably less than they deserved. The company itself though, as always is the case, got off pretty much scot-free. They paid a$3 million fine, which is basically a real, this is a$50 billion business now. actually more it was 50 billion now it's tragically at record share prices now it's 50 billion because there's a war going on to acquire it by the guy that started Chewy that's right of course the Ryan Cohen thing disgraced former CEO Devin Wenig who was subject to the original comment was staggering never charged himself he left eBay with a US 55 million it's so ridiculous this is everything that's wrong with corporate America or corporate because what the argument is is that this seems to be true the security division of eBay turned into a cult, right?

19:36It turned into a cult is the only way to describe it. And if you read the – we can get into detail, but if you read it like there were definitely cultish aspects of it. But what they're saying – what they're accepting is the people running eBay and the company as a whole can say we were ignorant of the fact that our security organisation was running a cult and terrorising people. I think that's totally wrong. Absolutely. If I could decide this, I would literally fine eBay$1 billion for this transgression so that no company in the future would ever dream of doing something like this. The bigger thing you'd do is you'd put the CEO on a perp walk.

20:13Because I think it's got the fish astronauts in there. They put the minions in there. So the CEO at one point told his communications chief about one of the couples, if we're ever going to take her down, now is the time. So this fish rotted from the head. Oh, I see. So there's actually evidence that the CEO knew exactly what was going on. Well, the CEO knew something was going on. He was the one who got the ball rolling and clearly then got out of hand down the line. I think it's tough to put him in jail for that, but definitely there should be penalties. How much responsibility does a leader of business have for what the underlings do?

20:43When we see, like, the answer is nothing, certainly in the US. When would you say he should be absolved? I would say if there was no evidence at all that he knew anything was going on with this couple, then you would say it's a pretty incompetent CEO for not asking questions about what's happening in security. I think if he knew nothing then jail was probably a bit harsh but he can certainly get fined. And he was not, he actually contributed. So basically what happened is - Who did the security guy report to? Not him. No, I think it went to the comms and so I think it went down the line. So the sign eventually got a lawyer and sued eBay thankfully and only last week, this is why I'm bringing it up now, so last week the party actually settled for, it was totally about 55 million US.

21:22So this is some pretty serious money. $46 went to the Steiners. $7 million went to charity. Devin Wenning, that scumbag CEO, had to pay$2 million to the Steiners himself and$1 million to charity. So there was a little bit of justice there that he had to pay something. But he got US 55, so it's a fraction of what he got paid. This is, you know everything that's wrong with corporate, the world, the corporate world, this kind of, this story. Well, the biggest damage that happened to him was the fact that you read this in the Wall Street Journal. I mean, that's probably the biggest damage that he suffered because the$2 million is largely inconsequential.

21:55Yeah, or totally inconsequential. It's not even 5%. It was 5 % of what he got paid as a severance, let alone what he got paid along the journey. Yeah, yeah. So that's inconsequential, right? So I think we agree completely on this. The problem is this. What's happened is, in an effort to make companies more accountable, they've increased the governance obligations on non-executive directors. That's what's happened in Australia, for example. This is obviously America, not Australia. I know, but I'm just giving an example. So it's not like people are blind to the fact that companies should have more responsibility.

22:27But what they do is they increase the penalties and the obligations on directors without realising how little control directors actually have over executives in the company. Especially no director could reasonably have been expected to know that this stuff was going on. And in the meantime, like, this stuff is completely unacceptable. And, yeah, I think that companies should have serious fines. Well, I think I'm actually less bothered about the company. I think it's good that the company's settled. I think the senior executives winning down should have become much more personal. Like unless, as Scott says, unless you perp walk these people, it will just continue to happen.

23:01Because now, who cares if the company pays? These guys don't care. It's a$50 billion company. It's like 0.1 % of the company's market cap was paid. It's completely irrelevant to the company. You can say, I mean, this is worse because this is a company using all of its massive resources to terrorise two individuals. But in general, you'd have to say, no one suffered any consequences from the financial crisis. Like, who suffered any consequences? Enron? I mean, largely people got off. Oh, people went to jail with Enron. Yeah, but largely people got off from Enron. A few unlucky people went to jail.