Canva Snaps Up Motion Graphics Startups as Adobe Shares Crater 30% in AI Selloff
Design software company Canva acquired two small startups Monday—motion graphics maker Cavalry and video ad platform MangoAI—as the privately-held company expands its toolkit while public market rivals face a brutal reckoning over artificial intelligence threats.
The deals, whose financial terms weren't disclosed, come as Wall Street has punished software vendors over concerns that AI will disrupt their business models. Adobe, Canva's larger public competitor, has seen its stock plunge 30% so far this year as investors question whether traditional design software can survive the generative AI wave.
For CFOs watching the software sector's violent repricing, Canva's acquisitive posture offers an interesting counterpoint. While public companies see their valuations collapse—making M&A harder to justify to shareholders—venture-backed Canva is using the moment to bolt on capabilities that could help it challenge Adobe more directly.
Cavalry is a four-person operation that sells subscriptions to software for creating two-dimensional animations. MangoAI, described as operating in "stealth mode," has built technology for generating short advertising videos. Cameron Adams, Canva's co-founder and chief product officer, told CNBC that customers have been requesting motion graphics capabilities, and that Canva has already used Cavalry's tools internally for its own projects. He noted the startup has gained attention among designers.
The timing is notable. Canva has been one of the highest-profile venture-backed companies in the design software space, popular with both professional designers and casual users. But the market it operates in is suddenly looking vulnerable. Adobe's 30% year-to-date decline isn't happening in isolation—software stocks broadly have been hammered in recent weeks as investors reassess which business models can withstand AI-driven disruption.
The question for finance leaders: is this a smart time to buy, or a sign of desperation? Canva's bet appears to be that motion graphics and AI-powered video creation are areas where it can differentiate, particularly as larger competitors deal with their own strategic paralysis. Acquiring small teams with specific technical capabilities is cheaper than building from scratch, and potentially faster than waiting for organic product development.
What's less clear is whether these acquisitions address the core AI threat that's spooking public market investors. Generative AI tools can now create designs, animations, and videos from text prompts—potentially commoditizing the exact capabilities that companies like Canva and Adobe have spent years building. Buying a four-person animation startup doesn't necessarily solve that existential question.
For CFOs in the software sector, the divergence between public and private market behavior is worth watching. Public companies face immediate shareholder pressure when AI concerns emerge, constraining their ability to make bold moves. Private companies like Canva, still operating with venture capital backing, have more room to maneuver—but they're also building toward an eventual public market reckoning of their own.
The broader pattern: as AI reshapes software economics, the companies that survive will likely be those that either fully embrace AI-native architectures or carve out defensible niches where human-directed tools still matter. Canva's acquisition strategy suggests it's betting on the latter, at least for now.
Responses (0 )