Canva just jacked up the price of its Team subscription by over 3X by touting its new AI features

Starting next year, Canva users will see a significant increase in subscription prices as the company continues to roll out its advanced generative AI features. Particularly impacted are global customers using Canva Teams, a subscription plan designed for businesses and teams, where prices are expected to rise by over 300% in some cases. Canva justifies this steep increase by pointing to the enhanced “expanded product experience” brought about by its AI-powered tools.

In the United States, Canva Teams users are reporting a sharp price jump—from $120 per year for up to five users to a staggering $500 per year. However, a 40% discount will temporarily reduce this to $300 for the first year. Meanwhile, in Australia, the flat fee of AUD 39.99 per month for five users is being replaced by a per-user charge of AUD 13.50, translating to a minimum 68% price hike for a five-person team, before any discounts.

These price adjustments come after many users had previously secured lower rates, which Canva no longer offers. In April, Canva quietly adjusted its pricing structure for new Teams subscribers to AUD 10 per month per user, with a minimum of three users required. Now, according to Canva’s communications lead, Louisa Green, existing users will also be transitioned to this updated pricing model starting in September, to align with the current value and pricing of the expanded product offerings.

Price justified by the new AI features

“Our suite of products has grown significantly over the last couple of years with the launch of new offerings like the Visual Suite and Magic Studio,” Green explained in a statement to The Verge.

Canva’s recent surge in generative AI features, such as the Magic Media text-to-image generator and the Magic Expand background extension tool, has transformed the platform from a design and marketing tool into a comprehensive workspace solution.

While Canva has made similar pricing adjustments in the past, these latest increases were communicated primarily through direct emails to customers, with no apparent impact on other subscription tiers like Pro and Enterprise.

Alienating small businesses

The price hike is more than just an inconvenience for small businesses who are using the application. It is a potential financial burden that could push them away from Canva all together. There are many small business owners who have voiced their frustration online, with some announcing plans to cancel their subscriptions or downgrade to Canva's pro plant to avoid the increased cost.

Canva's team subscription was designed to help businesses collaborate and create designs more efficiently. But with the price hike and the limit set on the minimum number of people that needs to be on the plan, it seems like it's getting harder to justify the cost of the price hike.

Users are looking for other design software alternatives

This shift toward premium pricing represents a significant departure for Canva, which was initially embraced as a cost-effective alternative to pricier graphic design software like Adobe express, Visme and even more niche tools that might better serve you without the hefty price tag. The substantial price hikes have sparked a wave of dissatisfaction among users, with some expressing their intent to cancel subscriptions and switch to Adobe products.

Canva's ambitious move might be a step towards greater profitability and new technological advancements. But it could also mark the beginning of its estrangement from the small businesses and teams that formed its backbone.

The message to canvas is clear: the company would have to provide equal leaps of value and user experience for them to pull off these kind of price hikes, or else the company would lose the foundation of its success.