Hey — It’s Nico.

Welcome back to Behind Tactics 🧠, your go-to source for innovative strategies that startups are deploying to carve out their niche in the market.

Today, we're exploring Canva's unconventional approach to startup acquisitions that is turning heads and rewriting the rulebook.

Instead of the typical playbook of migrating and dismantling acquired startups, Canva has been quietly revolutionizing the game with its unique integration strategy.

Let's dive into the canvas and paint a clearer picture! 🎨

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The Strategy

An Overview

Usually, startup acquisitions follow one of three paths:

• The buyer integrates the acquired solution into their platform.

• The buyer migrates the acquired startup’s customer base to their business.

• The buyer onboards the acquired startup’s team to the company.

After that, the acquired startup gets shut down. 

Canva, however, is doing things a little bit differently. Instead of closing the acquired startup, they keep it alive and add useful integrations with Canva. 

Let's see some examples to understand why this strategy is so clever…

Kaleido

In February 2021, Canva acquired Kaleido, owners of remove.bg, an image background removal tool. 

The first thing Canva did was add this background removal functionality into their app. 

This is where most startups would have been done with it. Acquire a startup, add their solutions to their platform, shut down the startup, and move on. 

But Canva was smarter about it. They kept remove.bg alive and added a button where the user can, in one click, move the image to Canva to keep editing it.

This transition from remove.bg to Canva is so smooth and straightforward that you do not even need a Canva account to keep editing your image.

Now, remove.bg gets 60M+ in visits per month, with 50% of the traffic being direct and the rest being organic. This is because remove.bg ranks in the first position of Google for thousands of extremely high search volume keywords, like “background remover” or “remove background”.

Canva could have killed remove.bg and tried to position itself as the go-to tool for background removals, but instead, they chose to leverage remove.bg’s popularity and implement a smooth integration to re-direct their large traffic into their own platform.

Pexels and Pixabay

In 2019, Canva acquired two of the biggest stock photo libraries: Pexels and Pixabay.

They were mostly looking to expand the images they offered to users on their platform but decided that they could also redirect some of the traffic in these sites to Canva with one simple button.

In both cases, they added a button that allows you to edit the image in Canva. 

These two websites must be getting Canva a ton of new users, as together they get 65M+ visits per month, the majority from organic traffic.

Flourish

In February 2022, Canva acquired Flourish, a data visualization platform. 

Once again, Canva was not only interested in adding the data-vis solutions to their platform but also leveraged Flourish 1M users by adding this small button to their editor:

Should I?

Why This Works

• They are acquiring companies whose users are potential Canva users. This strategy would not work if Canva was acquiring companies in a completely different niche, whose users are not interested in graphic design. And it would also not work if they tried to acquire a direct competitor, like Stencil (in this case, a button to “continue editing in Canva” would not make sense since Stencil already provides image editing features). The reason these acquisitions work is that Canva looks for other startups in the graphic design niche that provide a service they are not providing.

• They are leveraging the acquired companies’ product and marketing efforts. It would be possible for Canva to integrate remove.bg into their platform, but this would waste all of remove.bg branding efforts. Instead, Canva is taking advantage of the “remove.bg” keyword (which has a 1.1M monthly search volume on its own), the SEO built on the domain, and the product design that its users love.

• It keeps things simple. Rather than migrating the acquired tools into Canva, they followed an easier path. For remove.bg, they simply copied their tech. For Pexels and Pixabay, they simply added their image stock. For Flourish.studio, they simply added a link for Canva users to create charts in the app.

How to Apply It

There are three main ways of applying this acquisition strategy:

1) Search In Your Space

Look for tools in your same business’ niche that do something that your company doesn’t do. Ideally, the tool should have direct or organic traffic.

Then, add a one-click seamless integration with your tool (no accounts should be needed).

For example, the video-editing tool VEED could buy Unscreen, an AI tool for removing video backgrounds. Many users who are looking to remove video backgrounds could be interested in continue editing the video in VEED.

According to Similarweb, Unscreen gets 1M visits per month (80% of which comes from organic and direct traffic), so adding a button that says “continue editing in Veed” could be a great way for them to gain new users.

2) Search In a Different Space

Acquire a tool in a completely different space that does something your user might do as a step before or after using your tool.

For example, a CRM tool like Hubspot could buy BuiltWith, a company that shows which technologies a website is using.

Many people use BuiltWith to find leads, which they then take to their CRMs. If Hubspot builds a seamless integration with BuiltWith, I’m sure it’d drive many users to them.

3) Search For a Directory In Your Space

Acquire a directory website that is in your same business niche. The users of this website are very likely potential users of your tool, so making an integration in the directory can be fruitful.

For example, Coinbase, a cryptocurrency exchange platform, could acquire Coingecko, a crypto price tracking directory, and add a button for buying cryptos in Coinbase.

Another example is Canva’s acquisition of SlidesCarnaval, a site that offered free PowerPoint and Google Slides templates. They then added an eye-catching button to edit the templates in Canva:

Yes, But

• Sometimes it doesn’t make sense to keep the business operating because it has high costs or doesn’t generate significant revenue. An example of this happening could be Canva’s acquisition of SmartMockups, a tool for creating product mockups. For some undisclosed reason, instead of doing what they typically do, they’ve decided to shut down SmartMockups and create Canva Mockups with all of the mockup options that were previously available in the acquired platform.

• The integrations Canva builds into each of their acquired companies (the buttons they add) are only clicked by a small percentage of the users. If, instead, they fully integrated the acquired solutions into Canva (if they moved remove.bg to be only accessible within Canva, for example), they would drive far more users to their platform.

• They are missing the SEO power of all the sites they acquire. If they did 301 re-directions from these websites into Canva, it would make canva.com an even more powerful domain.

Keep Learning

Others Playing It

Semrush is another company that has been applying Canva’s acquisition strategy.

In 2022, Semrush acquired Backlinko, an SEO blog founded by Brian Dean, one of the most well-known people in the SEO industry.

Since then, Semrush has been editing all articles to strategically mention them. See how this On-Page SEO guide mentions using Semrush as one of the steps:

Now, this strategy is not exactly the same thing Canva is doing. Semrush did not build a seamless integration but rather focused on creating a well-thought-out product placement campaign.

Still, just like Canva, Semrush is acquiring other startups and keeping them alive so they can redirect their user base to their own platform. Backlinko gets 750K organic users per month, so you can bet Semrush is getting many thousands of users per month from this acquisition.

Go Deeper

• A list of all of Canva’s acquisitions.

• The full story of Semrush’s acquisition of Backlinko.

• Another recent acquisition of Semrush.

• A strategy to generate backlinks and organic traffic by building side projects.

• This list of ideas to start your side-project marketing campaign.

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That’s all for this edition.

Cheers,

Nico