The Empire Strikes Back! Adobe Completes a $20BN Move for Figma

Charlie Mitchell

A prominent member of the rebellion now joins the design tool empire

Adobe Analysis
The Empire Strikes Back! Adobe Completes a $20BN Move for Figma

Adobe has reached a deal to acquire Figma – a leading competitor of Adobe XD – for $20BN.

With Adobe XD, companies can create user interfaces, harnessing the platform to design apps and online experiences.

For many years, Adobe controlled the digital design space with such solutions, which often came at a high price point.

However, many developers started a rebellion, turning to alternatives. The most prominent? Seemingly Figma.

Indeed, over time, it started to steal Adobe’s bacon, boasting many similar features through a browser and removing the need for software installation. Its interface is also relatively straightforward for anyone to interact with.

Yet, as its most significant differentiator, Figma enabled greater collaboration in creating user experiences. For the first time, designers, engineers, and product managers could all access the same design – at the same time – and work together.

The capacity to deliver this collaboration seems central to this deal. As Shantanu Narayen, Chairman and CEO at Adobe, said: “Adobe’s greatness has been rooted in our ability to create new categories and deliver cutting-edge technologies through organic innovation and inorganic acquisitions.”

The combination of Adobe and Figma is transformational and will accelerate our vision for collaborative creativity.

Figma’s offering has proved a breath of fresh air in the start-up world, and – despite being less than six years old – it did not take long to enter the enterprise space either.

Its emergence likely caused concern at Adobe. Indeed, a recent CNBC article revealed: “Microsoft employees love Figma, and it’s testing the company’s cozy relationship with Adobe.”

Such a narrative continues when considering Figma’s latest valuation – in June 2021 – was at $10BN. It seems that Adobe is going above and beyond to acquire the company for twice this figure.

In this sense, Adobe perhaps needed Figma more than vice versa. Yet, Dylan Field, Co-Founder and CEO at Figma, voiced his excitement for the future. He stated:

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.

As inferred, Adobe will keep Figma operating as a separate entity.

However, this offered little solace for many Figma fans. Some voiced their concern at the news, anxious about potential price increases. Here are some of their reactions.

Of course, other options are available, as Figma is not the only Adobe XD competitor. Some deal detractors may turn to Canva, which achieved a $40BN valuation in 2021.

Nevertheless, the move will significantly strengthen Adobe’s digital design empire, following up its market leader recognition from Gartner in digital commerce.

In the case of Figma, a company only founded in 2016, the momentous deal is a testament to its incredible market disruption and product-led growth.

 

 


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