A bang for the domestic startup landscape: like that Commercial register It can be seen that the Australian Canva Inc, whose graphic design platform is currently valued at around six billion US dollars, became a 100 percent shareholder in the Viennese startup Kaleido AI around the two 29-year-old founders Benjamin Grössing and David Fankhauser in mid-February this year.
With its image and video processing tools “remove.bg” and “Unscreen”, Kaleido AI is considered the hidden champion of the domestic startup landscape. With the product “remove.bg” launched in 2018, backgrounds in images can be automatically removed in seconds. The tool is used by global brands such as Alibaba, Samsung and the New York Times, among others.
With the Unscreen tool, which has been available on the market since 2020, people and objects in videos can be released with just one click. The startup currently has around 20 million monthly users with its two tools.
“One of the largest exits in Austrian startup history”
The parties agreed not to disclose the exact amount that Canva Inc put on the table for Kaleido AI. As the startup officially communicates to the outside world, it is one of the “largest exits in Austrian startup history”.
To put it into perspective: In 2015, the Runtastic fitness app went to Adidas for around 220 million euros. The classifieds app Shpock was sold to the Norwegian media group Schibsted in the same year for around 200 million euros. According to industry insiders, the rumored purchase price for the MySugr takeover in 2017 was between 70 and 200 million euros.
As an industry insider explained to the brutkasten, the purchase price for Kaleido AI should amount to at least a high double-digit million amount. The deal between Kaleido AI and Canva, which was accompanied by i5invest and processed in two tranches, is writing Austrian startup history in terms of its size.
“Exit was not the goal for us”
In an incubator talk, the two founders Benjamin Grössing and David Fankhauser explained the background to the deal and their decision to sell Kaleido AI to Canva. “On Exit was never the goal for us. We just said that we want to make Visual AI accessible to the broadest possible audience. In the end, however, we decided that Canva was the perfect partner for this, ”says Fankhauser, adding:“ At Canva, we noticed that there is this fresh start-up spirit that companies of this size tend to lose. That ultimately convinced us. ”
Integration in Canva
Although the Exit was only formally completed in mid-February 2021, the remove.bg tool has been integrated into Canva’s graphic design platform for around a year. “Our remove.bg product is one of the most popular pro features and is used by more than 500,000 users on the Canva platform every day,” says Grössing.
At the same time as the takeover of the Viennese startup, Canva also communicated the takeover of the Czech startup Smartmockups, which gives users the opportunity to create realistic design mockups – from t-shirts to flyers to mugs.
Kaleido AI stays in Europe
According to Canva, both Kaleido AI and Smartmockups should continue to operate independently from their locations in Europe and at the same time strengthen Canva’s global presence with teams in Austria, Germany and the Czech Republic.
On the part of the graphic design platform Canva, reference is made to the approach to takeovers that took place in the past. The two platforms Pexels and Pixaby, which Canva bought in 2019, are cited as examples. “Both Pexels and Pixabay have remained the leading and preferred products in their industry even after Canva’s acquisition,” said Seb Ruiz, Canva’s Head of Apps and Integrations.
Kaleido AI wants to expand team further
As Grössing and Fankhauser explain, the takeover of Kaleido AI is intended to further accelerate its growth and the development of new Visual AI products that are already in the planning stage.
To this end, the team at the Vienna site is to be almost doubled. The startup plans to create 30 new jobs by the end of 2021. Kaleido AI currently has around 25 employees. In the past, according to the founders, new employees were hired mainly in German-speaking countries, although English is spoken in the company.
Personally, the two founders, Grössing and Fankhauser, will remain operational as managing directors in the company. “Now things really start. We currently have many AIs in development. The takeover gives us new opportunities that we couldn’t even think of, ”said Fankhauser.
Bootstrapping & Hockey-Stick Growth
It is not only the size of the deal that is unique for the domestic startup landscape. Also the previous growth and the fact that Kaleido AI up to Exit did not bring any external investor on board and thus belonged 50 percent each to Grössing and Fankhauser.
So far, Kaleido AI could completely get out of the Cashflow finance. The startup relied on a Software as a Service (SaaS) business model, the basic version of which is free. For the professional use of remove.bg, on the other hand, there are prepaid credits, monthly subscriptions and payment models tailored for large customers. At Unscreen, the quality and length of the videos are included in the pricing for larger amounts of data.
“It was a luxury position that at the beginning we had nothing to do with investors, who of course bring you a lot, but also cost you a lot of time. We wanted to put every second into our product, ”says Fankhauser.
The Bootstrapping-Strategy of the two founders ultimately worked and can be proven with impressive figures: Although Kaleido AI was only founded a good two years ago, the startup was able to record user growth of around 600 percent in 2020. The tool is currently used in over 180 countries. The startup recently cracked the limit of 100 million background distances per month, according to its own information.
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Viennese startup Kaleido creates largest exits Austrian startup history