In the ever-evolving landscape of design software, Canva has found itself at the center of a significant price hike debate, primarily attributed to its rapid expansion of generative AI features. The design platform, once known as an affordable alternative to Adobe, has dramatically raised its subscription costs, particularly for its Canva Teams product. While Canva raising prices is justified by pointing to its expanded suite of AI-driven tools, many customers are voicing frustration over the steep hike and the lack of transparent communication.
The Price Hike Breakdown
Canva’s decision to raise prices has been met with backlash, especially among its Teams users. In the U.S., the cost of a five-person Teams plan has jumped from $120 to $500 per year—a staggering 300% increase. Although the company is offering a 40% discount for the first 12 months to cushion the blow, the steep price rise is still causing concern among users. In Australia, the flat fee of $39.99 AUD per month for up to five users has been replaced with a $13.50 AUD per person model, representing a 68% increase for a five-person team. These changes only apply to Teams subscribers, leaving Canva Pro and Enterprise users unaffected for the time being.
What is particularly unsettling for many users is the way these changes were communicated. Unlike previous price adjustments, canva raising prices was communicated directly through customer emails, leaving some customers feeling blindsided. The lack of a public announcement raised concerns, especially given Canva’s traditionally user-friendly and accessible approach.
Why is Canva Raising Prices?
Canva’s justification for the price increase lies in its aggressive rollout of generative AI tools, which the company believes have significantly enhanced the platform’s value. According to Canva’s spokesperson, the price increase “reflects the expanded product experience,” specifically citing the introduction of Magic Studio and other AI-driven features.
Over the past few years, Canva has evolved from a simple design tool into a more comprehensive platform for businesses and design professionals. Generative AI tools such as Magic Media (a text-to-image generator) and Magic Expand (a background extension tool) have transformed the way users interact with the platform, allowing for more automation and creative flexibility.
The company argues that these AI enhancements justify the price hike. “Our original pricing reflected the early stage of this product and has remained unchanged for the last four years,” a Canva spokesperson said, explaining that the new pricing aligns with the current scope of the platform’s offerings.
The Role of Generative AI in Canva’s Future
The recent acquisition of Leonardo.ai, a startup specializing in generative AI, underscores Canva’s commitment to expanding its AI capabilities and a direct connection with canva raising prices. Leonardo.ai, which initially focused on video game asset creation, has broadened its scope to include image generation for industries like fashion, architecture, and advertising. This acquisition is expected to strengthen Canva’s existing AI tools and introduce new capabilities to the platform.
Leonardo.ai’s unique features, such as the Live Canvas tool, which allows users to generate images based on text and sketch prompts, are expected to be integrated into Canva’s Magic Studio. This integration could make Canva’s AI suite even more powerful, but it’s also a move that reinforces the company’s shift towards a more premium product offering.
With over 19 million registered users, Leonardo.ai will contribute significantly to Canva’s user base, further solidifying its position in the generative AI space. The acquisition is part of a broader strategy, as Canva prepares for a potential public listing in 2026.
Customer Backlash and Business Pressures
Despite Canva’s explanation, many customers are unhappy with the price increase, arguing that it undermines Canva’s original appeal as an affordable alternative to traditional design software like Adobe. The timing of the price hike—coinciding with Canva’s preparations for an IPO—has also raised concerns about the company’s broader business strategy.
Massive price hike from @canva, hitting everyone who has ever shared a folder with anyone, which they now have interpreted as meaning you have a ‘Team’. They just don’t get that we don’t want huge numbers of new features – we just want it to work and for price rises to be fair. pic.twitter.com/y3n08gf38z
— Dave Walker (@davewalker) August 30, 2024
Recent acquisitions, including the purchase of Serif (the company behind Affinity) and Leonardo.ai, signal Canva’s aggressive expansion, but they also suggest that the company is under pressure to grow rapidly. This rapid growth may be leading to these pricing changes as Canva looks to justify its value to investors and maintain its competitive edge in the market.
I had been using Canva for 2 years, but haden't used it since before my life transition shenanignas.
— Shin 🐻❄️【The Gremlin Squad】 (@medic_shindria) September 4, 2024
They incorporated A.I. and jacked the price when I wasn't looking? Just a vague reference in some e-mail in my spam folder?
I normally don't fill these out, but…
Yeeeeah… pic.twitter.com/Ze7Bt3zpYw
Conclusion
Canva’s generative AI advancements have undoubtedly transformed its platform, making it more powerful and versatile for businesses and design professionals. However, the steep price increases, coupled with a lack of clear communication, have left many long-time users feeling alienated. While Canva continues to position itself as a leader in the design space, the company will need to carefully balance its ambitions with the needs of its loyal customer base, especially as it moves closer to its IPO.
The ultimate question remains: will users see enough value in Canva’s AI tools to justify the higher costs, or will they seek out more affordable alternatives? For now, the future of Canva seems tied to the success of its AI-powered features, but only time will tell if the company can maintain its user base amidst the price hike controversy.
