Canva reached US$4 billion in annual recurring revenue by the end of 2025, with more than 265 million monthly active users and more than 31 million paying users, according to co-founder Cliff Obrecht. Its freemium model lets individuals design for free, then upgrade, bring in teams and eventually whole companies. AI features, boosted by its 2024 purchase of Leonardo.ai, now help justify higher prices.
Key takeaways
- Canva had more than 265 million monthly active users and more than 31 million paying users in 2025, and reached US$4 billion ARR by year end.
- Business accounts with more than 25 seats doubled over the year to about US$500 million in ARR: land and expand in action.
- Canva bought Sydney-based Leonardo.ai in July 2024 to strengthen its generative AI.
- In 2024 some long-standing US Teams customers faced a rise from $119.99 to $500 a year for five users, discounted to $300 in year one.
- A free tier this good is the marketing. But once people depend on you, price rises spend goodwill, so soften them.
Think about how most people first use Canva.
Someone needs a birthday invitation, or a flyer for the school fete, or a quick social post for their small business. A friend says, "Just use Canva." They sign up for free. Twenty minutes later, they have something that looks professional.
They come back next week. Then their boss sees what they made and asks if the whole marketing team could use it.
Nobody from Canva ever called them. No salesperson. No demo.
That's freemium done properly, and it's how a company from Australia built a US$4 billion recurring revenue business.
Was Canva in the book?
No, and in hindsight it should have been.
The Subscription Playbook covers freemium in Chapter Three, using examples like Spotify and Fortnite. Canva is a newer anchor case for this site because it shows every one of the book's freemium and land-and-expand ideas working at enormous scale, and it's Australian.
What are Canva's numbers?
In February 2026, co-founder and COO Cliff Obrecht told TechCrunch:
| Measure (2025) | Figure |
|---|---|
| Monthly active users | More than 265 million |
| Paying users | More than 31 million |
| Annual recurring revenue (end of 2025) | US$4 billion |
| ARR from business accounts with more than 25 seats | About US$500 million, doubled over the year |
A rough calculation from those figures: about 12% of monthly users pay.
In the book I quoted an average freemium conversion rate of 2 to 5 percent, and warned that at 2% you need a huge addressable market to make the numbers work. Canva has both: an enormous market (anyone who ever needs to make something look good) and a conversion rate several times the average.
How does the freemium funnel work?
Canva's model is a ladder. Each rung is free or cheap to step onto, and each one leads naturally to the next.
- Free individual. Design anything, for nothing. This is the marketing.
- Paid individual. Upgrade for premium content, extra tools and AI features.
- Team. Bring colleagues in, share brand assets, collaborate.
- Company. Larger business accounts with more seats, controls and support.
In the book, I describe land and expand with five factors: an attractive initial offer, product/market fit, re-earning the business, solid onboarding, and a funnel. Canva has all five. The "attractive initial offer" just happens to be free.
The fastest-growing rung in 2025 was the top one. Business accounts with more than 25 seats doubled to about US$500 million in ARR. Individuals brought Canva into their workplaces, and the workplaces started paying. My guide to land and expand walks through how to design that path.
Steal this: let your users sell for you
Canva's free users are, in effect, its sales team. Every flyer, deck and post they share shows someone else what the product can do. Ask yourself: what does a free user of your product create that other potential customers will see?
Where does AI fit in?
Growth in 2025 was partly propelled by AI tools. In July 2024, Canva bought Sydney-based Leonardo.ai to strengthen its generative AI.
AI does two jobs for Canva. It makes the paid tiers more valuable, and it gives the company a reason to revisit prices that hadn't moved in years.
Thinking about a price rise?
Model the MRR impact of a price increase and your break-even churn with the free Price Increase Simulator.
What happened when Canva raised prices?
Here's where freemium's power gets tested.
In September 2024, Fortune reported that some long-standing US Canva Teams customers would see their price rise from $119.99 a year for five users to $500 a year, discounted to $300 for the first year.
That's more than four times the old price, and two and a half times in year one.
Canva justified it with the AI features in its Magic Studio, and said the old pricing "reflected the early stage of this product and has remained unchanged for the last four years."
Did it work? Canva went on to reach US$4 billion ARR by the end of 2025, so customers clearly kept paying overall. But a rise that size spends goodwill. A Fortune headline reading "Canva hikes team subscription prices by 300%" is not the press any business wants. I go through the details, and how to avoid the worst of the backlash, in the companion case on Canva's 300% Teams price rise.
Why does it work for Canva, when freemium fails for so many?
Freemium isn't magic. In the book I'm clear that it can drain cash if free users cost you a lot to serve and rarely upgrade.
Canva gets away with it because:
- The free product is genuinely useful. People get a real result on day one.
- The output spreads. Every design shared is an ad.
- The upgrade path is obvious. Premium content, brand kits and team features solve problems people hit naturally as they use it more.
- The buyer changes as you climb. An individual on the free plan becomes the person who convinces their employer to buy 25 seats.
If your product doesn't have those features, a free trial or a reverse trial may suit you better than freemium. My freemium guide has a test you can run.
What you can steal
- Make your free tier your best marketing. It should deliver a real result fast, not a crippled demo.
- Design a clear ladder. Individual, team, company. Write down what someone gets at each rung and what pushes them up to the next.
- Make the output shareable. If what customers make with your product is seen by others, that's free distribution.
- Revisit legacy prices when you add major value. But do it with notice and a first-year discount, as Canva did. Test the impact first with the price increase simulator.
- Track free-to-paid conversion. Know your number and watch it every month. See our guide to free-to-paid conversion rates.
For an Australian business, also check your price-rise notices against local consumer law. My guide to raising subscription prices in Australia covers what to tell customers and when.
Pricing Table BuilderDesign a good-better-best pricing table and export it.Open the free tool →The lesson
Freemium plus product-led land and expand can build a US$4 billion recurring revenue business, from Australia. Once customers depend on you, new capability like AI can justify big price rises, but you'll spend goodwill doing it.
So, what could you give away that would make people come back next week, and bring their boss with them?
For the full product-led playbook, see my guide to product-led growth, and check Canva's current plans in our Canva pricing teardown.
Frequently asked questions
How does Canva make money if most users are free?
From the minority who pay. More than 31 million of its 265 million-plus monthly users paid in 2025, through individual Pro plans, team plans and enterprise accounts. The free tier attracts people and teaches them the product. Paid tiers add premium content, brand tools, collaboration and AI features, and businesses with more than 25 seats are a fast-growing slice of revenue.
What percentage of Canva users pay?
Using the figures Canva gave in February 2026, roughly 31 million paying users out of more than 265 million monthly active users is about 12%. That's a strong conversion rate for a freemium product with such a large free base. Most freemium products convert a much smaller share, so don't assume your own free tier will match it.
Why did Canva raise its Teams prices?
Canva said the old Teams pricing 'reflected the early stage of this product and has remained unchanged for the last four years,' and pointed to the AI features in its Magic Studio. Fortune reported in September 2024 that some long-standing US Teams customers would go from $119.99 a year for five users to $500 a year, with a first-year discount to $300.
Is Canva an Australian company?
Yes. Canva was founded and is headquartered in Australia, and its 2024 acquisition of Leonardo.ai brought another Sydney-based company into the group. That makes it one of the best local examples of a subscription business built on freemium and product-led growth, and a useful reference for Australian founders thinking about free tiers.
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Robert Coorey, MBA
Robert is the author of The Subscription Playbook and Feed a Starving Crowd and a Director at BPAG Accountants in Sydney. More about Robert.
Sources
- TechCrunch, Canva gets to $4B in revenue as LLM referral traffic rises (18 Feb 2026)
- Fortune, Canva hikes team subscription prices by 300%, citing AI features (3 Sep 2024)
- Canva Newsroom, Welcome to Canva, Leonardo! (29 Jul 2024)
Facts and prices checked 27 October 2026. Spotted something out of date? Tell us.