Shackpets | Available on iOS and Google Play Store

Adobe (ADBE) to acquire design software firm Figma for $20 billion

Figma has agreed to be acquired by Adobe for $20 billion because we can't have nice things.

22

Adobe has announced that it has agreed to acquire collaborative design platform Figma for $20 billion of cash and stock. The company stated that "the combination of Adobe and Figma will usher in a new era of collaborative creativity." Adobe also reported their Q3 2022 earnings results with EPS of $3.40/share beating expectations of $3.33/share, and revenues of $4.43 billion coming in-line with Wall Street's projections. The company did provide somewhat disappointing revenue guidance for Q4 2022, which paired with today's Figma deal has ADBE stock trading down over 16% today.

Screenshot of TC-2000 charting software showing the last two months of price action on a daily time period stock chart.
Adobe (ADBE) shares are down over 16% on the news of this massive $20 billion Figma deal.
Source: TC-2000

“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.”

“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.

Figma was founded in 2012 by Dyland Field and Evan Wallace. The company's service is known for providing collaborative design solutions on a web-based client. Figma currently operates with tremendously high gross margins of 90% and is likely to grow going forward now that Adobe is here to accelerate revenue growth. 


Here are the details of the $20 billion deal:

Under the definitive agreement, Adobe has agreed to acquire Figma for approximately $20 billion, comprised of approximately half cash and half stock, subject to customary adjustments. Approximately 6 million additional restricted stock units will be granted to Figma’s CEO and employees that will vest over four years subsequent to closing. Adobe expects the cash consideration to be financed through cash on hand and, if necessary, a term loan. The 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.

Upon the closing of the transaction, Dylan Field, Figma’s co-founder and CEO, will continue to lead the Figma team, reporting to David Wadhwani, president of Adobe’s Digital Media business. Until the transaction closes, each company will continue to operate independently.


Screenshot of Figma's website landing page.
Figma's website has been home to a lot of great collaborative projects.
Source: Figma

While it sort of stinks to see such a useful product and viable competitor like Figma get gobbled up by a much larger company, it appears that Adobe plans to let the company continue to operate on its own.

Luminary

Asif Khan is the Luminary and majority shareholder of Shacknews. He began his career in video game journalism as a freelancer in 2001 for Tendobox.com. Asif is a CPA and was formerly an investment adviser representative. After much success in his own personal investments, he retired from his day job in financial services and is currently focused on new private investments. His favorite PC game of all time is Duke Nukem 3D, and he is an unapologetic fan of most things Nintendo. Asif first frequented the Shack when it was sCary's Shugashack to find all things Quake. When he is not immersed in investments or gaming he is a purveyor of fine electronic music. Asif also has an irrational love of Cleveland sports.

From The Chatty
  • reply
    September 15, 2022 10:20 AM

    Asif Khan posted a new article, Adobe (ADBE) to acquire design software firm Figma for $20 billion

      • reply
        September 15, 2022 5:41 AM

        Curious if the feds are gonna hop on this one.

      • reply
        September 15, 2022 6:53 AM

        20 instagrams

      • reply
        September 15, 2022 7:08 AM

        Noooooooooooooooooo

      • reply
        September 15, 2022 7:11 AM

        Figma balls

      • reply
        September 15, 2022 7:14 AM

        😭😭😭😭😭

      • reply
        September 15, 2022 7:15 AM

        I was trying to figure out why they were getting into high end action figure models for way too long.

      • reply
        September 15, 2022 7:45 AM

        Gross.

      • reply
        September 15, 2022 7:49 AM

        Lo, there is a great wailing and gnashing of teeth among the other designers I follow, but being design tool agnostic myself it doesn't really bother me.

        • reply
          September 15, 2022 7:56 AM

          And as much as I don't like Adobe the company, I actually find myself using Adobe XD fairly often because it is pared down and faster than Sketch and isn't web-based like Figma.

        • reply
          September 15, 2022 7:59 AM

          I do love Photoshop and Lightroom but its stupid Cloud client sucks ass.

        • reply
          September 15, 2022 8:01 AM

          Ha, there are even designers talking about "Should I change careers?" this morning. Talk about being too invested in your tools.

      • reply
        September 15, 2022 7:51 AM

        Awesome for the founders, crazy money hats

        • reply
          September 15, 2022 11:04 AM

          and the VC's behind it - they got 200% valuation for the exit

      • reply
        September 15, 2022 7:54 AM

        I was wondering how long until this happened. It’s basically the Zoom of a post-WFH design world.

      • reply
        September 15, 2022 8:01 AM

        Still not as bad as The Verge's new logo font, am i rite???

      • reply
        September 15, 2022 8:18 AM

        It occurs to me that the designers that are upset about this should remember that they are designers and design a new alternative. Come up with an accessibility-focused open source design tool that takes the best from Figma, Sketch, XD, Axure, etc.

        • reply
          September 15, 2022 10:35 AM

          How will we design the new design tool without FIGMA??

        • reply
          September 15, 2022 10:40 AM

          Ok, I designed it, it's currently just figma and it's named ligma. Make it happen.

        • reply
          September 15, 2022 12:01 PM

          Just one .fig

      • reply
        September 15, 2022 9:18 AM

        RIP

      • reply
        September 15, 2022 9:24 AM

        lol I wonder if the Adobe XD team saw this coming

        • reply
          September 15, 2022 9:28 AM

          My company merged with a competitor and shit canned the competing tool we were building. That competing tool was a few years behind, but also a much better thought out tool that actually integrated with our other tools.

          The one we merged with got hacked, still lacks features of the old one, took forever to work on the same login and still doesn’t entirely, and the full dev team left. Great merger.

      • reply
        September 15, 2022 9:59 AM

        Amazing change one letter and it goes from a childish meme to a $20B company.

    • reply
      September 15, 2022 10:23 AM

      "Figma" lmao like 'Ligma" hahahaha

    • reply
      September 15, 2022 10:33 AM

      Why people continue to give Adobe money is beyond me. I guess Adobe Illustrator is pretty good but their legacy software such as Adobe Acrobat tarnishes any respect I could have for them.

      • reply
        September 15, 2022 10:45 AM

        Entrenchment and lack of holistic competition with the entire Creative Cloud offering.

        Yeah there are reasonably viable competitors for most of their products individually but not so sure there's anything that bundles all the stuff that Creative Cloud gives you all together.

      • reply
        September 15, 2022 10:46 AM

        I know how to use their tools and switching would be annoying. That's about it.

        • reply
          September 15, 2022 2:36 PM

          Maybe I'm just bitter about Adobe's tool (or tools) for PDF creation. You had to manually position everything with absolute positioning. You can select several things, but you can't select several elements in the PDF based on some common attribute like the number of inches from the left side of the document.

          Editing a PDF with any complexity is a huge pain using tools from Adobe.

      • reply
        September 15, 2022 1:47 PM

        Photoshop. Besides just people having it as muscle memory I think there's things it does that are either excruciating or literally impossible in other applications.

      • reply
        September 15, 2022 3:35 PM

        who says it's legacy? I guess you haven't seen Acrobat DC with sign and send embedded in authoring PDFs.

      • reply
        September 15, 2022 3:57 PM

        Also this thread made me realize that I haven't used any Adobe apps much in months. Cancelled my CC sub.

        • reply
          September 15, 2022 4:05 PM

          Good, good I finally convinced somebody to stop sending money to Adobe.

          There is good software out there but usually Adobe doesn't have anything to do with it.

    • reply
      September 15, 2022 10:46 AM

      been saying figma is amazing

      nobody wants a crummy desktop app, shit is for the birds

      • reply
        September 15, 2022 11:10 AM

        bunch of people got PAID today big time

        • reply
          September 15, 2022 1:28 PM

          oh dude, 20 billion dollar acquisition?

          paid doesn't even begin to describe what those seed / A / B employees are about to experience in their bank accounts

          • reply
            September 15, 2022 1:49 PM

            at 200% valuation over current value, yeah … woah

            • reply
              September 15, 2022 1:58 PM

              has to be because they had no compelling reason to sell, and adobe had every reason to want them off the market / in the fold

              i don't think adobe really had a great answer to figma, and i have no belief they could have built a viable competitor. figma is a sincerely impressive technical feat. the performance they've squeezed out of browsers is wild and imo they are one of the frontrunners of heavyweight + performant web applications.

              had to pay a premium to get them to fold their cards for sure

              • reply
                September 15, 2022 3:32 PM

                I mean browsers have been around for 30+ years and they started pushing web apps not too long after. Given the software and hardware progress since, I would hope someone could squeeze performance out of browsers, it just still sucks as an application platform in general, performant or no.

                • reply
                  September 15, 2022 3:52 PM

                  Ehhh, web applications in the real application sense of the word have only really been around for maybe a decade. The lessons and insights to build well in that platform have thus been developing and I think always suffered due to the differences between browser APIs / capabilities that have only really recently begun to converge upon a good standard.

                  Take that into consideration against the backdrop of actively hostile entities like Apple trying to pull mindshare away from web applications as a means to develop strong first-party tooling and it's been an uphill battle.

                  The power has been there but it really does take exceptional engineers to build sincerely complex multiplayer applications in web. So many companies throw junior talent at front ends and as such doom the apps to shit performance with no hope of ever achieving 60 hz rendering etc.

                  Figma is a shining example of what you can accomplish with web applications and this 20 billion dollar acquisition serves as a signal to leaders of engineering organizations around the world that it's serious, worthwhile technology.

        • reply
          September 15, 2022 1:45 PM

          i know two early employees here - this being their second acquisition in a row lol

    • reply
      September 15, 2022 11:36 AM

      Vector Figma

Hello, Meet Lola