Aiming to Dominate Adobe(ADBE.US) as the Software Powerhouse! As AI panic sweeps through software stocks, Canva launches an offensive with acquisitions

Recently, investors have been worried about the potential threats of artificial intelligence (AI), causing software stocks to plummet. In the startup space, Canva has been soaring thanks to its popularity among designers, but the market is showing signs of fragility—its main competitor Adobe (ADBE.US) has seen its stock price decline by 30% this year. Facing these market upheavals, the design software company has chosen to take proactive steps, accelerating mergers and acquisitions. On Monday, Canva announced the acquisition of two startups, Cavalry and MangoAI, to strengthen its competitive edge against Adobe.

Cavalry is a small startup with only four employees, specializing in subscription-based 2D animation software; quietly operated MangoAI focuses on short video advertising technology. The transaction amounts were not disclosed.

Canva co-founder and product lead Cameron Adams said in an interview that users have been requesting Canva to introduce animated graphics features. Cavalry has already been used internally by Canva and is seen by many designers on social media as a potential alternative to Adobe After Effects, attracting significant attention.

Canva will keep Cavalry operating independently with its subscription service, while integrating its animation technology into Canva’s core products and the professional design suite, Affinity. It is understood that Canva acquired Affinity in 2024 and made it available for free in October of that year.

According to Cavalry’s official website, employees from Amazon (AMZN.US), ByteDance, Google (GOOGL.US), and OpenAI are paying to use its products.

Canva plans to incorporate MangoAI’s technology into its enterprise-level ad creation tool, Canva Grow, which charges corporate users $250 per person annually. MangoAI can track video ad performance and provide optimization suggestions.

“Creating high-quality short videos involves many steps,” Adams explained. “This includes editing footage, reusing content from different marketing campaigns, and connecting a compelling call-to-action at the end of one video to an eye-catching opening in another.”

He added, “Analyzing these data across marketing campaigns is part of Canva Grow’s full vision, and MangoAI will help achieve this.”

Canva disclosed that its annualized revenue exceeded $4 billion in fiscal year 2025, a 36% increase year-over-year; Adobe’s quarterly revenue last November was $6.2 billion, up 10%. As of Monday, Adobe’s market cap reached $101 billion; before this round of software stock declines, Canva was valued at $42 billion after its secondary stock offering in August last year.

Adams said Canva has observed users creating slides and social media posts with generative AI, but AI is not a panacea.

“AI can easily handle 80% of the work,” he stated. “But the last 20% is crucial—ensuring content can be confidently published, accurately conveying brand image, reaching the target audience, and achieving marketing goals. That part is the most difficult.”

Currently, with over 5,000 employees, Canva has no plans for a new round of funding.

“Our revenue growth hasn’t stalled, user growth remains strong, and with the integration of AI technology, our product experience continues to improve,” Adams concluded.