Exclusive: Expansion-minded CanvasPop raises $3.3 million funding

Adrian Salamunovic, co-founder and CIO, Canvaspop

CanvasPop, the decade-old Canadian photo canvas shop, has taken its first funding round with an eye for expansion.The $3.3 million infusion from some of Canada’s most-established VC firms will provide capital for future expansion into new product areas and possible acquisitions, says Adrian Salamunovic, co-founder and Chief Innovation Officer, CanvasPop. (See the full press release below).

“We started the company originally in 2005 with myself and Nazim (Ahmed, CEO of CanvasPop),” says Salamunovic. ” We started DNA11 to make personalized artwork from people’s DNA. The idea was ‘art meets science.’ We did $1 million in artwork the first year, and realized customers will pay a premium for custom and personalized work.”

Because the company was bootstrapped, the company developed expertise in PR and “earned” media, he says. “Anybody can spend money, but you can bleed yourself dry.”

By 2009, the two saw an opportunity in the digital canvas printing marketing, with no dominant brand and players who were relatively slow-moving Web 1.0 companies. Starting with just $30,000, CanvasPop saw an immediate boost, in part because of a unique quality.

“We were the only company who would work with low-resolution pictures,” says Salamunovic. “We developed ways to produce images from an iPhone, with a very straightforward process. Removing friction is number one. After that, we just kept scaling, adding Instagram. We were the first internet company to partner with Groupon on a national scale. We got very lucky.”

Today, CanvasPop has about 60 employees spread over two facilities: The Ottawa headquarters and a dedicated 30,000-square-foot production facility in Las Vegas, Nev. Salamunovic says the majority of the company’s sales are in the United States, about 10% in Canada and 5-8% in Europe. He categorizes the typical customer as “The Dwell magazine crowd, more upscale.”

He describes the CanvasPop as a tech company, but with a strong customer service and marketing component.

“Product is a thing you hang on the wall,” says Salumonvic. “[The brand is] about the user experience, the customer and the technology. To compete today, you better be amazing at customer service, at partnering, and at getting high-quality partners.”

“Customer acquisition is earned media,” he adds. “We’re constantly in the press. There’s not a month we’re not on GMA or a other morning show. We own our own media stack in house and our reaching out all the time.”

So, why funding at this time?

“We want to experiment a little bit more and develop new products,” concludes Salamunovic. “Celtic House is Canada’s oldest VC company, so we have access to powerful resources if we need them.”



Press release

CanvasPop raises $3.3 million in funding round led by Celtic House Venture Partners and BDC Capital with Participation from Prominent Angel Investors

Funding will be used to expand into new product categories and continue growth.

“We’re proud to be working with BDC and Celtic house and our team of world class investors,” said Nazim Ahmed, CEO of CanvasPop. “We are energized by the confidence these investors have shown in our business plan, our marketing strategy and our vision to become a leading platform in the canvas printing and photo gifting space.”

Founded in 2009, Ottawa-based CanvasPop offers online photo printing services that allow anyone to print virtually any image, including Instagram, Facebook and iPhone pictures, via CanvasPop’s printing and dedicated distribution facilities in the United States and Canada. To date, CanvasPop has been largely bootstrapped and supported by rounds of debt and mezzanine financing from BDC. The company has been able to organically build a successful business with over 450,000 individual customers.

“We have been impressed with the business that the CanvasPop team has built over the past few years with very little outside capital. We believe that today’s capital investment will allow Canvaspop to significantly expand their product mix and to accelerate their market penetration as the personalized photo printing market continues to grow,” said Robert Shaw, Director at BDC’s Growth & Transition Capital group.

“CanvasPop is at the forefront of the rapidly growing shift from in-store to online shopping as consumers seek out customized products, services and buying experiences,” said David Adderley, Partner at Celtic House. “We are excited to be part of such an innovative company led by two proven entrepreneurs who have successfully built a number of online businesses over the past decade.”

“We’re using this capital to continue expanding our market share and help compete with incumbents such as Shutterfly, Snapfish, Framebridge, Circle Graphics, Art.com, Mixbook, Vistaprint, Photobox, Picanova and many smaller players in a highly fragmented market,” said Adrian Salamunovic, co-founder and Chief Innovation Officer of CanvasPop. “Ultimately, we will be focusing on growth and innovation in a space that has not seen a lot of innovation. This will include investments into new product categories and streamlining operations, and M&A.”

About Canvaspop

CanvasPop is the web’s most innovative leader in on-demand printing and personalized photo art and photo gifting products. Founded in 2009, the company focuses on providing world-class customer support, delivering the highest quality products, and is constantly innovating the way consumers can order personalized products online. CanvasPop has over 450,000 happy customers with printing and distribution facilities in the United States and Canada and ships across the EU. For more information, please visit canvaspop.com.

About Celtic House Venture Partners

Celtic House has collaborated with management teams and repeat entrepreneurs to develop technology companies from the inception phase through to exit, generating 25 initial public offerings and successful acquisitions. From offices in Toronto and Ottawa, Celtic House manages in excess of $425 million across three funds. To find out more, visit celtic-house.com

About BDC Growth & Transition Capital

With more than $2 billion under management, BDC Capital is the investment arm of BDC, serving as a strategic partner to Canada’s most innovative and high potential firms. It offers a range of equity, venture capital and flexible growth and transition capital solutions to help Canadian entrepreneurs scale their businesses into global champions. To find out more, visit bdc.ca/capital.