Canva announces a 5x Price increase. Really?
Canva just announced a (massive) price increase, sparking reactions ranging from frustration to… well, more frustration!
But let’s take a step back and analyze this with a bit more objectivity (and a key takeaway at the end 👇).
TBH, Canva has always been a bargain. Their free plan is incredibly generous, and the paid plan for small businesses was just $120/year for up to 5 users. Now, existing users on this plan are being migrated to a new plan at $300/year for 3 users. On the surface, that feels like a huge price hike.
However, here’s why this move is needed (from the business perspective):
⛔ Value vs. Price: Canva has consistently delivered great value for the money. There’s room for them to increase prices.
⛔ User Distribution: Only 1% of users pay. The paid users essentially subsidize the other 99%.
⛔ Lack of Upsell Options: The pricing structure had no room to accommodate users with a higher willingness to pay — just free or $100/year.
To clarify, the new $300 plan has been there since April. What’s causing the uproar is that existing users are now being transitioned to this pricing (gradually).
Objectively, is this a good move, for the company and for its customers?
😢 The argument that AI investments justify the price increase? I’m not convinced. That’s Canva’s problem, not the customer’s. The real question is whether customers see enough added value to pay more (think, cost vs. value).
😢 Yes, Canva has a lot of new features. But justifying a price increase solely on features? Be cautious. The value delivered to the customer must align with their willingness to pay.
😑 The challenge: By moving to this new pricing, Canva risks alienating a core group of users — small teams and budget-conscious non-professional designers.
😁 But even at the new price point, Canva is still affordable.
😑 They also justify the hike by pointing out that prices hadn’t increased in years. That’s valid, but it’s a double-edged sword.
All in all, Canva remains an affordable tool for many, but it seems they’re phasing out their pro-sumer and small teams segment. This shift opens a significant opportunity for new players to cater to this market. The “great value for money” approach is something many companies are leveraging. For example, check out my podcast with the founders of Neeto and Tally, who are wisely capitalizing on this trend.
⚡ Main takeaway: several and frequent increases are much better than one big bang! I wrote about this topic many times and it just underlines one important aspect of pricing: you should work on it every day, not once every 5 years!
My name is Salva, I am a product exec and Senior Partner at Reasonable Product, a boutique Product Advisory Firm.
I write about product pricing, e-commerce/marketplaces, subscription models, and modern product organizations. I mainly engage and work in tech products, including SaaS, Marketplaces, and IoT (Hardware + Software).
My superpower is to move between ambiguity (as in creativity, innovation, opportunity, and ‘thinking out of the box’) and structure (as in ‘getting things done’ and getting real impact).
I am firmly convinced that you can help others only if you have lived the same challenges: I have been lucky enough to practice product leadership in companies of different sizes and with different product maturity. Doing product right is hard: I felt the pain myself and developed my methods to get to efficient product teams that produce meaningful work.