Adobe Agrees to Buy Collaborative Design Rival Figma for $20 Billion
Adobe acquires cloud-based design platform Figma in a massive $20 billion cash and stock deal. The pricey purchase allows Adobe to absorb a direct competitor that currently generates over $400 million in annual recurring revenue.
Adobe announces a massive $20 billion cash and stock deal to acquire Figma, a cloud-based design software company that allows teams to collaborate in real time. The acquisition targets a direct competitor to Adobe's own XD program and causes Adobe shares to drop 17%, marking the steepest single-day decline for the stock since 2010. Figma co-founder and CEO Dylan Field continues to lead the company under Adobe's umbrella once the transaction closes.
The purchase price stands out in the current market because Adobe pays roughly 50 times Figma's revenue at a time when cloud software sales multiples contract dramatically across the tech industry. Figma generates over $400 million in annual recurring revenue in 2022, a significant jump from its $10 billion private valuation during its last funding round in 2021. Major venture capital firms like Index Ventures, Greylock Partners, and Kleiner Perkins back the successful startup.
Adobe plans to integrate its existing technologies for illustration, photography, and video directly into Figma's popular web platform. Adobe CEO Shantanu Narayen describes the combination of the two companies as a transformational move that accelerates the company's vision for collaborative creativity. The deal blends Figma's modern, browser-based collaborative tools with Adobe's traditional suite of professional creative applications like Photoshop and Illustrator.