The Strategic Move that Transformed Canva’s Valuation from $3B to $40B

When building a valuable business, understanding what drives that value is essential; whether you’re planning an exit or maximising the return on your life’s work. Total Addressable Market (TAM) is a critical factor that shapes how acquirers view your business and how strategically you should think about growth.

TAM represents the total revenue opportunity available if you captured 100% of demand for your product or service. When your TAM appears limited, your growth prospects look capped. And when growth looks capped, so does your business value, whether you’re seeking investment, preparing for succession, or building wealth through business success.

Canva: From Sydney to the World

Sydney-based Canva launched in 2013 as an accessible graphic design platform. The company had a strong product, loyal customers, and solid growth. But co-founders Melanie Perkins and Cliff Obrecht recognised that staying Australian-focused would limit their value.

Instead of accepting a constrained TAM, Canva aggressively proved their market was global. By 2020, they’d expanded to over 190 countries with 30 million monthly users, doubling their valuation from $3.2 billion to $6 billion in eight months. By 2021, their valuation reached $40 billion as they demonstrated their ability to serve Fortune 500 companies worldwide.

The strategy? Prove TAM expansion with evidence, not promises.

The Tactic: Evidence Over Hypotheticals

Whether building value for sale or positioning for growth, hypothetical stories carry little weight. Saying “we could sell internationally” or “we could add modules” isn’t enough. You need proof.

Go global, even in small steps. Signing a handful of international customers proves your solution isn’t geographically limited. Canva’s US office in Austin and localisation across India, Brazil, and Germany transformed perceptions, from an Australian design tool to a global enterprise platform.

Show new use cases. Launching add-ons and securing paying customers demonstrates existing clients will buy more. Canva evolved from simple graphics into presentations, video editing, websites, and collaboration tools. Each capability proved additional revenue streams within their customer base.

The Business Valuation Impact

Companies that demonstrate TAM expansion command significantly higher valuations. According to Value Builder Analytics, businesses that can easily expand geographically receive acquisition offers averaging 18% higher. In a study of 3,380 companies, those that found geographic replication “fairly easy” or “very easy” received an average multiple of 4.1x EBITDA, compared to 3.5x for those who found it difficult.

This aligns with one of the 8 Drivers of Company Value, the Growth Potential driver. Whether speaking with acquirers, investors, or measuring business improvement progress, demonstrable expansion pathways through new geographies, customer segments, or products directly impact valuation.

What This Means for Your Business

Your company’s value is tied to future potential, not just current performance. The bigger your TAM, the bigger your value potential. But building business value requires tangible evidence, not hypotheticals.

Start with evidence-based steps: Land one or two international customers to demonstrate geographic viability. Launch a pilot service to show appetite for expanded offerings. Document success and use it to reshape how stakeholders perceive your growth ceiling.

Strategic TAM expansion isn’t overnight transformation. It’s methodically building evidence that your business can grow beyond current boundaries. Whether preparing for sale or focused on building long-term value, that evidence translates directly into higher multiples.

The businesses commanding premium valuations aren’t necessarily the largest, they’re among the ones demonstrating the greatest growth potential. Start proving your TAM today, and you’ll raise the ceiling on your company’s value long before you need to.