Design platform giant Canva has announced the acquisition of innovative AI startup Leonardo.ai, significantly broadening Canva's AI capabilities. Although the details of the transaction have not been disclosed, Canva co-founder Cameron Adams has revealed that the deal was completed in a mix of cash and stock, with all 120 employees of Leonardo.ai joining Canva.

Adams told TechCrunch that Leonardo.ai will continue to operate independently, focusing on innovation and research and development, now supported by Canva's resources. The acquisition aims to promote the development of Leonardo.ai's platform and to increase user growth through Canva's investment, including expanding API services and strengthening the development of foundational models.

Founded in 2022 in Sydney, Leonardo.ai initially focused on creating assets for video games but later expanded to AI image creation for industries such as fashion, advertising, and architecture. The company offers collaborative tools for models, private cloud services, and API access, enabling customers to build their technical infrastructure on the platform.

Leonardo.ai's Live Canvas feature, which creates realistic images in real-time through text prompts and sketches, demonstrates its difference from other AI art platforms. Although details of the training of its flagship model Phoenix are unclear, the company claims it was trained on legally sourced data.

Canva is open to creators using generative AI and has committed to paying $200 million to creators who agree to train the company's AI models. The addition of Leonardo.ai is expected to bring new momentum to Canva's Magic Studio AI suite, which has previously raised over $38.8 million from various investors.

Adams said they will explore the possibility of integrating Leonardo's technology into Magic Studio, including enhancing existing tools or introducing new generative AI features. Canva has been investing in generative AI tools since December 2022, having previously acquired Kaleido to provide a foundation for AI work.

Leonardo.ai is Canva's eighth acquisition and the second this year, following the $380 million acquisition of British design company Affinity. Canva also owns presentation startup Zeetings, free image library sites Pixabay and Pexels, and Czech-based product model application Smartmockups.

Founded in 2012, Canva has raised over $560 million in funding, with a valuation of $26 billion and nearly $2 billion in revenue. The company has over 180 million monthly active users worldwide. Adams said the acquisition is an important step in building a powerful integrated visual AI product, which will help Canva's AI products continue to lead and provide new possibilities for the growing community of teams and businesses using Canva.