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Affinity Announces It Has Been Acquired by Canva

On March 26, the Affinity team broke news in a video on X that they have been “officially acquired by Canva.” The blockbuster move has stunned the creative world and will undoubtedly heat up competition between Canva and Adobe, the two largest players in the creative software space. 

Official numbers on how much the cash and stock deal was worth have yet to be released, but so far it’s been reported by multiple outlets that the figure is somewhere in the ballpark of “hundreds of millions of [British] pounds.” (Affinity is a British company)

There are many angles to this acquisition that make the deal highly intriguing, and many implications as to how it will affect the creative software space, and users of creative software, for the foreseeable future. 

Canva Needs a New Niche

Canva has been eating up Adobe’s market share for the better part of the last decade with its browser-based, drag-and-drop content creation tool. However, it has done so without offering a proper suite of professional desktop design tools for creating design assets from scratch – a huge piece missing in its arsenal to dethrone Adobe. 

Graph from Canva.com showcasing growth of active monthly users from 2013 to 2024

Finding Better Ways to Monetize Users

Canva has undoubtedly captured a large user base with its free and easy-to-use Canva Editor, which also has a premium version, boasting over 170 million active users as of 2024. However, despite having somewhere in the ballpark of 7x the user base of Adobe Creative Cloud (which has around 20-25 million subscribers), Canva has an estimated market cap ($26b) that’s 8x smaller than Adobe’s market cap ($227b).

This means Canva needed to find a new and improved revenue model for monetizing its user base. It also needed to explore new market segments to continue to find growth as it becomes a mature company (rather than a growth-stage startup).

Countering Adobe Express

Additionally, Adobe pushed into the browser editor space with the introduction of Adobe Express in 2021 (a rebrand of its Adobe Spark product), an unabashed attempt at grabbing back lost market share from Canva. This only heightened Canva’s urgency to expand its reach and counter Adobe with desktop-based offerings.

If Canva wanted to remain competitive or become the dominant player in the creative software space, it needed to offer a more robust set of design tools that reached new customers and opened additional streams of income. By acquiring Affinity, Canva addresses this need, strengthening its product portfolio and accessing a previously untapped user base. 

Canva Looking to Balance Its Demographics?

Demographics add another interesting dimension to the Canva acquisition of Affinity.

Canva Has an Affinity for Women

If you keep your finger on the pulse of the design world, you know that Canva has always seemed to resonate with and market to women more than men. 

Looking at traffic and demographic distribution statistics from Similar Web, just over 60% of Canva.com’s site visitors are female. Affinity, on the other hand, has almost the exact opposite user demographics with just over 62% of its site visitors being male (also according to Similar Web)*. 

By acquiring Affinity, Canva can have its flagship Canva Editor that’s more popular among women, and a new suite of desktop editing and design software more popular among men – thus potentially evening out its demographic distribution. 

By contrast, Adobe’s demographics skew male – though the figures aren’t as lopsided as Canva’s or Affinity’s, with just below 54% of Adobe’s website traffic coming from men*. Adobe may have taken solace in the past that Canva was historically targeting and resonating with women over men, and therefore not necessarily challenging its core user base. But those days are over. With the Affinity acquisition, Canva is now unquestionably a more direct threat to Adobe’s core user base.

*Since Canva is a browser-based editor, website traffic data for Canva.com is likely more accurate at depicting user demographics than website traffic data for the Affinity and Adobe websites, which offer mostly desktop software (though Adobe also has some browser-based applications like Adobe Express and Creative Cloud). Direct user demographics data is not publicly available for Adobe or Affinity products.

Addressing Affinity’s AI Problem

Artificial Intelligence is playing a major role in reshaping the creative software landscape, with applications like Dall-E, MidJourney, and Stable Diffusion turning the industry on its head seemingly overnight. As a result, Canva and Adobe have been forced to adapt quickly to avoid becoming obsolete to burgeoning AI startups.

Both companies have successfully integrated AI into their core offerings in recent years to keep users satiated. 

Affinity, however, has not adapted, and its desktop applications continue to lack any AI integration. This has now become a glaring weakness for the British software developer.

Affinity’s Innovation Issues Predate AI

Even prior to AI’s monumental rise, Affinity was far behind Adobe when it came to smart editing features. The “Quick Selection Brush” in Affinity Photo, for example, requires many more steps than Adobe’s one-click smart selection tools for intelligently outlining complex objects. Adobe also has one-click background removal. Affinity has no dedicated background removal tool.

Affinity was staring down the harsh reality that it needed to find the resources to innovate, and fast, or watch itself fade into obsolescence. 

Canva’s Magic Design feature harnesses text-to-image AI features to generate branded content.

Canva Has the Resources and Talent to Implement AI in Affinity Products

Now, as a member of the Canva family, Affinity will presumably have access to more talent and capital. That will help facilitate the injection of AI and other smart editing features into its software at a faster pace.

Canva has already shown that it can be light on its feet with new technology, introducing Magic Design, an AI design tool, in its Canva Editor in 2022. It has also given users access to text-to-image generators from third-party APIs like Imagen from Google and Dall-E from Open AI.

It is reasonable to expect Canva to perform similar integrations inside the Affinity desktop suite.

Adobe has gone all-in on integrating AI with its legacy desktop platforms, like Generative Fill in Photoshop and Text to Vector in Adobe Illustrator.

Canva will be looking to leverage its new assets to catch up to Adobe’s wildly popular AI tools like Generative Fill introduced in Adobe Photoshop, or Text to Vector features introduced in Adobe Illustrator. Comparable features will likely make their way into Affinity’s desktop apps.

New AI Integration Means Increased Cost for Consumers

These new features/functionality seldom come without a cost, though.

Adobe’s desktop AI features have opened new revenue streams for the behemoth corporation. Adobe announced price increases for subscribers in North America, South America, Central America, and Europe in a September 2023 press release entitled “All new, AI-powered Creative Cloud release and pricing update.” These price hikes quickly followed successful beta testing of new AI offerings in its desktop apps.

In the press release, the company announced a $2/month price increase for single product plans, and a $5/month increase for the Creative Cloud Individual All Apps plan. These price increases were made “to reflect the increased value that we have already delivered to our members and given new costs associated with generative AI content creation.” 

The press release also outlined a new “Generative Credits” model that includes an allotment of free “fast” generative credits each month for subscribers. When those fast credits run out, users have the option to purchase more through a plan upgrade.

It’s safe to assume that Canva will be looking to harness the power of AI and desktop software to implement its own version of Adobe’s subscription + generative credits model.

Consolidation Concerns as a Duopoly Forms

Canva Inc. will undoubtedly benefit from this acquisition, but how will users fare in the end? 

There is upside to the cross-pollination of culture and technology between Canva and Affinity. New functionality will reach both platforms in the near-term. Plus, users will get added value at no additional cost during “beta testing.”

Long-term, however, users may find themselves faced with price hikes and paywalls. This may be coupled with dwindling levels of creative freedom. That’s because when the dust settles, there will only be two main players in the creative software space: Adobe and Canva.

One could argue this is an improvement over what used to be a total monopoly controlled by Adobe in the creative software space. Conversely, one could also argue that Affinity was player number three in this space, and now only two players remain in what has become a duopoly.

The Side Effects of Duopolies

While some of the economic effects of a duopoly are debatable (such as price increases), there is concrete evidence suggesting such market conditions have an undesirable effect on the industries in which they form. In a 2018 article from Harvard Business Review titled “Is Lack of Competition Strangling the U.S. Economy?,” the article’s author, David Wessel, argues that while companies see profit increases as a result of “concentrated markets” – markets where there’s only a few major players – there are myriad negative side effects that result from such economic conditions. These negative effects include decreased competition and lower innovation, among others.

As larger companies dominate a concentrated market, Wessel says, they use their power to “squeeze out” or buy up their competition. Such behavior leaves consumers with far less options than they would’ve had in a healthy market. 

Adobe’s First Real Challenger?

As I mentioned earlier, one could make the case that Canva’s rise could be seen as an increase in competition. After all, Adobe has long had a monopoly on offering a complete creative suite of products.

There have always been some alternatives to single Adobe apps. For example, Apple offered Final Cut Pro while BlackMagic offered DaVinci Resolve as video editing alternatives to Premiere Pro. Figma offered its own UX design platform as an alternative to Adobe XD (which Adobe almost acquired for $20 billion, though they called the deal off in late 2023). Blender, a free software company, offered an alternative to Adobe Substance and Adobe After Effects. 

There has never been a single company, though, that has offered a comparable, complete suite of creative products like Adobe’s. (See my earlier note about large companies squeezing out competition – Adobe has been doing this for decades. It has repeatedly squashed or acquired challengers to its market dominance to maintain its monopoly).

Canva may have finally broken through, and this could lead to increased overall competition and therefore more benefits for users. 

So, Canva Will Turn Affinity Into a Subscription Product, Right?

One pervasive anxiety amongst the general public is that Canva will inevitably migrate Affinity over to a subscription-based model. The noise around this fear got so loud that Affinity felt the need to address it via an article and graphic on its X account. 

Affinity posted this “Four pledges to the community” graphic, along with a link to an article titled “The Affinity and Canva Pledge,” in a post on X in response to concerns over Affinity adopting a subscription-based model following Canva’s acquisition.

In the article, titled “The Affinity and Canva Pledge,” Canva essentially promises to always offer some kind of “perpetual license” option. However, it also alludes to the possibility of having a subscription option for Affinity apps: 

If we do offer a subscription, it will only ever be as an option alongside the perpetual model, for those who prefer it. This fits with enabling Canva users to start adopting Affinity. It could also allow us to offer Affinity users a way to scale their workflows using Canva as a platform to share and collaborate on their Affinity assets, if they choose to.”

From “The Affinity and Canva Pledge,” Affinity.Serif.com

Opening the Door for Open Source

With corporate creative apps continuing to consolidate and acquire competitors, that leaves users with fewer and fewer options for where to turn when they can no longer stomach subscription software.

This is where free and open source software comes in to save the day. 

Blender is one of the most popular free and open source software options for creatives, and is even considered the industry standard for certain 3D features by some

There has always been a community of developers and creatives that believe the general public has the right to access free software for their creative endeavors. This ethos has lead to the development of several viable free creative software apps, including:

  • GIMP (Gnu Image Manipulation Program) – a free photo editing and photo retouching app with digital painting and graphic design tools
  • Inkscape – a free scalable vector graphics program for illustrators and graphic designers
  • Blender – a powerful free 3D computer graphics software used for 3d sculpting, animation, modeling, and rendering, plus video editing
  • Krita – a free digital painting app and raster graphics editor with 2D animation features
  • Darktable – a free RAW image developer for editing digital photography and non-destructive RAW image post-processing
  • Audacity – a free digital audio editor and recording application software
  • PenPot – a free, browser-based UX design tool with collaboration and vector graphics features 
  • LibreOffice – a free productivity suite for viewing or creating word documents, spreadsheets, and presentations
  • WordPress– a free content management system for designing and developing websites

Now Is the Time to Support Free and Open Source Software

All of these software are community supported and developed, which means anyone can contribute. I highly recommend donating to your project of choice to help keep these programs funded. However, you can also contribute code if you have development experience or report bugs/request new features as you use the software.

Of course, participating in free and open source software beyond simply downloading and using the software is totally optional. 

Final Thoughts

In the end, only time will tell what will come of Canva’s major acquisition and how it will impact the lives of millions of creatives around the world. Unsurprisingly, Adobe made a major announcement on the same day as the Affinity announcement, introducing a new suite of “generative, AI-first” marketing products known as “GenStudio.”

Both Canva and Adobe will continue the crusade of “adding value” to their products, and communicating that added value to customers, in order to keep revenue streams growing and flowing for the foreseeable future. 

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