To Affinity and beyond...
The business news that matters
Hello and welcome to the latest edition of Off to Lunch…
The Nottingham-based photo editing tool Affinity has been bought by Canva, the fast-growing Australian tech business, in a deal worth “several hundred million pounds”.
The deal will involve Affinity’s team of around 90 staff joining Canva. It marks a significant moment for the promising UK business, which was founded as Serif in 1987.
Affinity makes money by charging people to buy its online photo editor and design apps. The most recent accounts for Serif Group show that it generated revenues of £31.2 million in 2022, up from £23.4 million in 2021 year, with pre-tax profits of £16.2 million, up from £13.6 million the previous year.
The terms of the deal have not been disclosed. However, Cliff Obrecht, the co-founder and chief operating officer of Canva, told Bloomberg it was a cash and shares deal worth “several hundred million pounds”.
Canva is one of the fastest-growing businesses in the world and has been valued at $40 billion (£32 billion). It was founded in Australia in 2013 and has been reportedly looking at a multi-billion dollar IPO in the US. Canva offers a collection of online tools for graphic design and has emerged as a rival to Adobe. It has more than 170 million users every month.
Canva’s expansion in Europe is being led by Duncan Clark, a former environmental journalist at The Guardian. Clark quit journalism to build a start-up called Flourish, which offered online tools to build interactive content and data visualisations. He sold Flourish to Canva in early 2022 and is now the head of Canva’s European business, rapidly building a team from its base in east London.
The photo at the top of the newsletter today shows Ashley Hewson, the chief executive of Affinity, with Clark. Hewson said: “We've worked tirelessly to challenge the status quo, delivering professional-grade creative software that is both accessible and affordable. Canva’s commitment to empowering everyone to create aligns perfectly with those values. We couldn't be more excited about becoming part of the Canva family and can't wait to see what we will achieve together.”
If you are interested in learning more about Canva and the story behind the business then you are in luck. We have interviewed Duncan Clark for the latest episode of our Business Leader podcast. The episode looks at how he went from a journalist to being at the centre of a tech giant, and what Canva’s ambitions for the future are.
You can listen to the episode on Substack here, Spotify here and Apple here
Other stories that matter…
1. The challenges in the hospitality industry have been laid bare after reports that Revolution Bars is looking to close a quarter of its venues and Papa Johns said it would close 43 of its takeaway pizza sites in the UK, equivalent to one in 10 of its locations. You can read Sky New’s story on Revolution here and more on Papa Johns here. Revolution has confirmed in a statement that it is “actively exploring all the strategic options available to it to improve the future prospects of the group”. It said this includes a restructuring or sale. You see the statement here
2. Grocery price inflation has slowed to 4.5 per cent, the lowest since February 2022, according to new data from Kantar. More here
3. Mark Zuckerberg, the chief executive of Meta, is writing personal emails to AI researchers at Google’s DeepMind to try to hire them. Story here
4. The chief executive of Whoop, which makes a wearable health tracker, offers staff a $100-a-month incentive to get more sleep. He explains why in an interview here
5. “My mission has always been – since the very first space in Clerkenwell – to support the innovation system.” An interviewing interview with Gabriela Hersham, the co-founder and chief executive of Huckletree, on how she built a UK rival to WeWork. You can read the piece by CityAM here
The new Business Leader…
The new Business Leader website and magazine have now launched. We are building a new inspirational, aspirational and agenda-setting business publication for the UK. You can read our analysis, interviews and expert columnists on our website by clicking the image below. Our new magazine is now available in shops and you can subscribe to your own print or digital version by clicking here
And finally…
Some book recommendations for Spring from Adam Grant, the psychologist and management professor at Wharton in the US. These include Co-Intelligence by Ethan Mollick, which looks at how AI tools can make us smarter, Move by Move by Maurice Ashley, the chess player, which examines how to think about strategy, and The Ritual Effect by Michael Norton, which is about the power of routines and how to establish new ones. You can find the full-list here
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