Adobe's $20 billion Figma deal raises eyebrows and rings antitrust bells

Ananya Bhattacharya
3 min read
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A burgeoning design startup will now be owned by the very giant it was born to rival.

Since Figma debuted in 2016, it’s been touted as an Adobe killer for being more efficient, collaborative, and affordable. On Sept. 15, Adobe announced it was buying the San Francisco-based firm in a $20 billion half-cash and half-stock deal.

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This purchase price is double what Figma was valued at during its last funding round last year.

An anti-Adobe start

When Figma first launched, its CEO Dylan Field presented the product as the David to Adobe’s Goliath.

At the time, he told TechCrunch that the 40-year-old giant “doesn’t understand collaboration” and that its Creative Cloud offering is “really cloud in name only.”

Figma, meanwhile, became a hit for being a design-oriented tool focused on seamless collaboration.

Quotable

“Our goal is to be Figma not Adobe” —Field’s tweet from Jan 29, 2021

Partners in cloud

A year and a half later, things appear to have changed as Figma is on its way to become “Adobe’s Instagram.”

For Figma, the big bucks present a big growth opportunity. The deal comes “with access to Adobe’s technology, expertise and resources in the creative space,” CEO Dylan Field wrote in a Sept. 15 blogpost.

“For example, we will have the opportunity to incorporate their expertise in imaging, photography, illustration, video, 3D and font technology to the Figma platform,” he elaborated.

Will Adobe kill Figma?

For now, Adobe is “deeply committed” to keeping Figma operating autonomously, wrote Fields, who will continue to serve as CEO.

The company currently has no plan to change Figma’s pricing, and the product will remain free for education.

Design Twitter, though, has its doubts about how long this will last, given Adobe’s notorious reputation for being unaffordable and clunky.

The curious case of Adobe

Wall Street wasn’t thrilled with the acquisition announcement. Adobe’s share price plummeted 16% on the news, as well on its mixed bag earnings results.

Industry insiders, however, don’t understand the dumping. The deal appears to add value to the legacy software firm.

“I would argue that Adobe without Figma was a much riskier asset to hold, given that Figma would eventually eat large amounts of Adobe revenue,” Amal Dorai, partner at seed-stage emerging-tech VC firm Anorak Ventures, tweeted. “If you would sell it after the acquisition announcement, you should have really sold it way before.”

In addition to skepticism from users, there’s one glaring caveat for investors: What if antitrust issues come up and the deal doesn’t go through?

“Then the acquisition offer just revealed that adobe themselves do not believe they can compete with Figma,” researcher and investor Vaska Atta-Darkua pointed out.

Fun fact

The Adobe-Figma deal marks the biggest ever takeover of a privately-owned software company, according to Bloomberg.

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