Adobe acquires Figma design platform for $20 billion

Last week, Adobe announced their intention to acquire figma, a web-based collaborative product design platform, for $20 billion. The transaction will be paid for half in cash and half in shares. In addition, approximately 6 million restricted stock units will be granted to the CEO and employees of Figma over four years after the closing of the agreement.

The deal is expected to close in 2023, subject to customary closing conditions, regulatory approvals and Figma shareholder approvals. Dylan Field, co-founder and CEO of Figma, will continue to lead the team. He will report to David Wadhwani, President of Adobe’s Digital Media Division, after closing. Until then, the two companies will operate independently.

“Adobe’s greatness is built on our ability to create new categories and deliver cutting-edge technologies through organic innovation and inorganic acquisitions,” said Shantanu Narayen, president and CEO of Adobe, in a statement. . Press release of September 15, 2022. “The combination of Adobe and Figma is transformational and will accelerate our vision for collaborative creativity.”

Adobe shared the news in its September 15 investor presentation for their third quarter fiscal 2022 financial statements. Adobe said the combined company will accelerate four strategic pillars:

  • Empower the world with content- and task-driven creativity
  • Advance all creative categories on desktop, web, and mobile
  • Enable seamless collaboration between all stakeholders
  • Inspire and empower the community through sharing and monetization

According Business Intern, the Figma design platform is one of Adobe’s main competitors. Between 2020 and 2021, the private valuation of the company has increased from $2 billion to $10 billion. The appeal for Adobe is to expand their product offering and reach and allow them to modernize their own product offerings. For example, Adobe can expand into the virtual whiteboard.

“Adobe and Figma share a passion for helping individuals and teams be more creative and productive. With Adobe and Figma’s broad product portfolio, the combined company will have a rare opportunity to power the future of work by bringing together brainstorming, sharing, creativity and collaboration capabilities and delivering these innovations to hundreds of millions of customers,” Adobe said in the Press release.

Source: Figma Blog

About Adobe

Founded in 1982 by Charles Geschke and John Warnock, Adobe’s mission is to change the world through digital experiences. The company is based in San Jose, California, and has more than 28,000 employees worldwide. Their main product categories include Adobe Creative Cloud, Adobe Document Cloud, and Adobe Experience Cloud.

For the quarter ended September 2, 2022, Adobe reported record revenue of $4.43 billion, a 13% year-over-year increase, net income of $1.14 billion and diluted earnings per share of $2.42 (GAAP). Subscription revenue is the largest revenue segment at $4.13 billion, followed by services and other revenue at $179 million, and product revenue at $126 million.

About Figma

Figma was founded in 2012 by Field and Evan Wallace, who wanted to create a platform to support collaborative design on the web. With their Figma and FigJam tools, designers building mobile and web apps can collaborate through multiplayer workflows using sophisticated design systems and a developer ecosystem. Based in San Francisco, Figma has approximately 850 employees. The company is expected to add new annualized recurring net revenue (ARR) of approximately $200 million this year, topping $400 million by year-end.

Figma’s design platform uses a three-tier freemium model. For Figma design and prototyping tools, the starter level is free; the Figma Professional tier is $12 per editor per month billed annually (or $15 per editor per month billed monthly); and the Figma Organization tier is $45 per editor per month billed annually. by Figma FigJam whiteboard product also has three tiers: the starter tier is free; FigJam Professional costs $3 per editor per month billed annually or $5 per month billed monthly; and FigJam Organization is $5 per editor per month billed annually.

In a September 15 blog post, Field said the deal has been in the works for a few months. He said the acquisition is an opportunity for Figma to accelerate its growth and innovation, while retaining its autonomy. Field assured the designers that while changes are coming, many will remain the same.

“Our Friends of Figma program will continue to spread to new local communities. Recognizing that we are in an unpredictable inflationary environment, we currently have no plans to alter Figma pricing. Finally, all Figma will continue to be free for education. Figma’s educational offering was a key part of our conversations and Adobe is completely aligned with growing the number of designers/developers/creatives around the world,” field wrote.

Insider grip

According The edge, the creative community is concerned about Adobe’s acquisition of another design platform, especially one that is a key competitor. Some say this narrows the choice in the design market. While Adobe and Figma say it all, will Figma be able to run standalone? Will the two companies’ products be integrated in any way? Will the merger survive the scrutiny of regulators? It’s too early to answer any of these questions, but it certainly looks like a strategic move by Adobe and a growth opportunity for both companies.