Canva, Heidi Health and NAB all cut staff in the same week, months after Culture Amp’s third round. What the cuts say about valuations, capital raising and how buyers will diligence software.
Photo: Madeline Liu / Unsplash
Photo: Madeline Liu / Unsplash
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Canva roles cut, changed or relocated: 22% of its workforce
In three days, two of Australia’s most valuable private tech companies told staff they had grown too big, the country’s biggest business lender pushed back the timing of 2,500 job cuts, and the RBA lifted the cash rate to an 18-year high. None of it was a fire sale. All of it is a price signal.
They join Atlassian, which cut 1,600 jobs in March, about 30% of them in Australia, and WiseTech, which announced 2,000 cuts in February. The common thread is not a shortage of revenue. It is a repricing of how many people a dollar of software revenue needs.
Canva is the benchmark for Australian private software, so its numbers travel. In August it told investors it now expects 2026 revenue growth of 20%, down from 30%. Blackbird and AirTree then had their Canva holdings revalued 17% lower, to US$34.9 billion. The independent valuation used for employee shares fell about 20% to US$31 billion, and secondary broker Hiive was offering stock at an implied price around US$30 billion. The 2025 peak was US$42 billion.
This is not a struggling business. June-quarter revenue rose 25.2% to US$921.9 million, Canva has been profitable for nine years, and it held US$1.47 billion in cash at the end of June. The problem is cost to serve. Generative AI features are expensive to run across a huge free user base, and Canva said it had leaned too heavily on frontier models and slowed some launches to rebuild its architecture. Blackbird says the cost of serving AI has since fallen by about 90%. Meanwhile general-purpose chatbots can now make a passable poster or deck for little or nothing.
A 2027 US listing had been flagged. Reporting on the markdown suggests it could slip until the valuation recovers.
The read: when the most profitable private software company in the country, still growing above 20%, takes out a fifth of its workforce, it resets what “efficient” means for every comparable. Expect buyers and investors to ask every software business the Canva question: what does your revenue cost to serve once AI is in the cost of goods, and how many people do you actually need?
In September Heidi announced $475 million: a $140 million Series C led by Blackbird, plus $335 million from General Catalyst’s Customer Value Fund. The valuation rose to $1.26 billion, from $704 million at its Series B in October 2025. Heidi says it supports about three million patient interactions a week across more than 190 countries.
Read the structure, not the headline. The $335 million buys no shares. It funds sales and marketing, is drawn against milestones and is repaid from a share of the revenue that spending produces. Of the $475 million, the equity was $140 million.
Then came the cut. Capital Brief reported the Melbourne R&D team, customer support and sales would be hit hardest; Heidi’s own note says it will invest more in support and R&D. Both can be true when a company is re-mixing rather than shrinking. Separately, on 29 October practice software provider Best Practice said running Heidi’s new AI agents inside its Bp Premier system breached its licence, and moved to ban bots and automation in its terms. Heidi disputes parts of that. Nothing reported links the dispute to the job cuts.
The read: revenue-based growth capital is cheap on dilution, but it only pays off if each marketing dollar converts efficiently, so it rewards a lean cost base. And a product that runs inside someone else’s software inherits their licence terms. Both belong in diligence.
Culture Amp’s path shows what happens when the reset comes in instalments. Blackbird cut its valuation by 23.5%. The company lost A$91.5 million across FY24 and FY25, including A$37 million in FY25. Its founder moved to the chair in January and a new chief executive took over. The June round of about 70 roles was reported to focus on middle management.
The public market has already done the maths. Latimer Partners tracks 128 ASX-listed tech companies: by March, 80% had fallen in value in 2026, and software multiples that peaked at 14 times revenue in 2021 were down to 3.5 times. The ASX All Technology Index fell 19% in the 12 months to March. Per-seat software has a particular problem: when customers cut their own headcount, they need fewer seats.
The read: private valuations set in 2021 have to meet public multiples eventually. The meeting point is a down round, a structured round, a secondary at a discount, or a sale. For buyers, a 2021 cap table is a negotiating position, not a valuation.
NAB’s cuts matter to dealmakers for a different reason: it is the country’s biggest business lender. Its FY26 cash earnings were $6.14 billion, down 13.4% and below consensus of about $6.33 billion. Excluding large notable items they were broadly flat at $7.09 billion. The credit impairment charge rose 86% to $1.55 billion, including a $403 million top-up to forward-looking provisions. The bank cited duplication, slow decisions, risk, rising competition, rapid technology change and a softening economy as reasons for the restructure.
One detail is worth a second look. At the half, NAB changed how it capitalises software, which cut cash earnings by $949 million after tax. NAB linked the change to the rapidly changing technology environment.
The read: a bank provisioning for stress and taking out cost is unlikely to stretch on leveraged mid-market deals, which leaves more of that work to private credit, with the strains we covered last month. And if a major bank now treats its own software as a shorter-lived asset, buyers should ask the same question of the capitalised development costs in a target’s balance sheet.
Capital is available for AI infrastructure and a few category leaders. Everyone else has to show efficiency. A credible cost plan now belongs in the raise deck: it reads as discipline, not distress.
Thousands of experienced product, engineering and go-to-market people are coming onto the market in Sydney and Melbourne in a matter of months. Some will start the next round of companies. Mid-market businesses that were priced out of that talent for a decade may now be able to hire it, which is its own kind of acquisition.
General information only. Not financial product advice. Figures are as reported. Canva figures are in US dollars; all others are in Australian dollars.