Adobe acquires Figma for $20 billion

Adobe announced that it is acquiring Figma for $20 billion, comprised of approximately half cash and half stock. It is interesting to note that Figma was valued at $10 billion by the end of May 2021 when it raised $200 million.

Adobe says it will grant Figma’s CEO and employees approximately 6 million additional restricted stock units which will vest over four years subsequent to closing.

Started by CEO, Dylan Field and Evan Wallace in 2012, Figma makes it possible for everyone who designs interactive mobile and web applications to collaborate through multi-player workflows, sophisticated design systems and a rich, extensible developer ecosystem.

Figma has been a threat to Adobe due to its fact that it is cheaper, easier to use, collaborative and modern and has been very popular among many designers. The company has built an efficient, high-growth business, expecting to add approximately $200 million in net new ARR this year, surpassing $400 million in total ARR exiting 2022, with best-in-class net dollar retention of greater than 150 percent.. It boasts of gross margins of approximately 90 percent and positive operating cash flows.

Some say that Adobe’s acquisition of Figma is a way of defending its business by killing off competition.

Founded in December 1982 by John Warnock and Charles Geschke, Adobe says it connects “content and data and introduce new technologies that democratize creativity, shape the next generation of storytelling, and inspire entirely new categories of business.”

“Figma has built a phenomenal product design platform on the web,” said David Wadhwani, president of Adobe’s Digital Media business. “We look forward to partnering with their incredible team and vibrant community to accelerate our joint mission to reimagine the future of creativity and productivity.”

“With Adobe’s amazing innovation and expertise, especially in 3D, video, vector, imaging and fonts, we can further reimagine end-to-end product design in the browser, while building new tools and spaces to empower customers to design products faster and more easily,” said Dylan Field, co-founder and CEO, Figma.

Adobe says Figma will continue to operate autonomously and cofounder Dylan Field will continue to serve as CEO, reporting to David Wadhwani, Adobe’s Chief Business Officer, Digital Media.

“Adobe’s greatness has been rooted in our ability to create new categories and deliver cutting-edge technologies through organic innovation and inorganic acquisitions,” said Shantanu Narayen, chairman and CEO, Adobe. “The combination of Adobe and Figma is transformational and will accelerate our vision for collaborative creativity.”

The acquisition transaction is expected to close in 2023, “subject to the receipt of required regulatory clearances and approvals and the satisfaction of other closing conditions, including the approval of Figma’s stockholders.”

Adobe acquired Frame.io, a video review and collaboration platform for $1.2 billion in 2021.