Canva’s plotting another $773m share sale at a higher $56 billion valuation – and becoming a US company is one reason why former employees may need to sell

News emerged this week that Canva was looking at another secondary share sale, worth up to US$500 million (A$762m) with its valuation increasing by more than 15% to US$37 billion (A$56.2bn).

It seem surprising with a US listing on the Nasdaq expected as soon as 2026. But in breaking the news The Information reported that the sale would allow the Australian-founded software company to delay its IPO.

A key reason why it’s happening soon became apparent after Canva wrote to former employees earlier this month about the shares they received while working there.

Canva is no longer an Australian business. Earlier this year, following in the footsteps of Atlassian, it set up a parent company based in the US. The email to its alumni, dubbed “Canvanauts”, told them the move was “in line with international best practices” and “sets us up for long-term success, including preparing for a future IPO.”

But the move came with a sting in the tale for former staff with Canva shares.

As the email explained it: “These changes are an exciting step forward for our long-term growth, but they are likely to create a tax obligation for you as a former Canvanaut”.

They’ve been given new shares of equal value in the new parent company, but in the eyes of the Australian Tax Office (ATO) the restructure is viewed as vesting, with the former staff selling the old shares issued in Australia, then buying new ones in the US parent company. The “sell” triggers a tax bill many of those shareholders expected when the company went public, but now they’ll have to pay that tax bill later this year.

“This effectively brings forward a tax event that would otherwise have occurred at IPO or another liquidity event and means the ATO is requiring that you pay tax based on the value of your Canva 2018 Plan options as part of your personal tax return,” Canva explained.

It reportedly involves shares worth hundreds of millions, with the ATO likely to get a quarter of that value around October.

While they expected to pay tax when the business went public, some will have seven-figure tax bills for their shares, which kinda makes the fuss over the federal government’s taxes on unrealised gains in self-managed super funds worth more than $3 million look like small change.

Sell to pay

Luckily, Canva is here to help, the company explained.

“We’ll be facilitating an optional secondary sale (designed to): fully cover your potential tax obligation; provide you with additional liquidity” the email said.

The sale is like to occur in September, with those who received equity in Canva’s 2016, 2018, 2019 and 2024 share plans eligible to take part, but only with company’s approval.

They’ll be allowed to sell up to 20% of their vested equity, capped at US$1 million (A$1.5m) on top of selling enough shares to cover their tax bill.

That means, for example, Australian alumni can sell up to 67% of their equity (47% for the maximum possible tax rate, plus another 20%).

A spokesperson for Canva said the change involved “a small number of people”.

“Our alumni remain an important part of the Canva journey and we’re committed to ensuring no one is left out of pocket by providing access to loans and the option to sell a portion of equity in our upcoming secondary to manage any tax payments,” they said.

Canva has slowly been lifting its valuation in the last year amid a series of secondary share sales.

The $56 billion valuation is a record in Australian dollar terms as the AUD slumped against the USD in the last three years.

Canva’s previous valuation peak was $54.5 billion in 2021, but that was based on a US$40 billion valuation at the time – $3bn more than the pending sale price.

A Canva spokesperson told Startup Daily that “While we’re not able to comment on the specifics of ongoing litigation, Canva strongly opposes baseless claims driven purely by financial strategy.”

Canva’s chief operating officer and cofounder Cliff Obrecht, was slightly more open and scathing on LinkedIn, revealing that his company is “fighting a recent wave” of what he calls “patent trolls”.

“Imagine leading a patent troll company. You wake up in the morning, you make your cup of coffee, make your kids some pancakes and then they ask you what you do…. imagine the shame,” he wrote.

“They don’t build or contribute to the industries they target. Their playbook is to acquire old patents and file vague, low-quality lawsuits at scale, betting that most companies will pay out quickly to avoid the cost and distraction of fighting back.

“It’s a multi-billion dollar tax on the global economy that drains resources and attention, particularly from innovative startups and growth-stage companies. Canva is fighting a recent wave of these, and will fight them to the end.”