Adobe Inc announced a $20 billion acquisition of cloud-based designer platform Figma to help it expand tools for creative professionals. Adobe’s cash-and-stock deal is the largest buyout of a privately held software startup company.
During the pandemic, demand for San Francisco-based Figma, which allows customers to collaborate on software as they build it, increased as more people worked remotely. Its web-based collaborative platform for design and brainstorming is popular among technology companies such as Zoom Video Communications, Airbnb Inc, and Google.
In recent years, Figma’s customer base has grown to include software designers at large corporations and individuals creating lightweight games, maps, and presentations. It has also gained a devoted student following.
Shantanu Narayen, CEO of Adobe, called Figma’s business “the future of work” and said there were “tremendous opportunities” in combining it with his company’s offerings, such as document reader Acrobat and online whiteboard Figjam. According to Adobe Chief, the combination benefits “literally anyone who is a knowledge worker.”
“We’re confident that in the long run, this will be a significant value for their shareholders as well as our shareholders,” Narayen said.
The co-founder of Figma will lead the company
Adobe expects the transaction to close in 2023, subject to regulatory and other approvals. Dylan Field will continue to lead the Figma team after the acquisition, reporting to David Wadhwani, president of Adobe’s digital media business. Figma will remain available as a standalone product. If either company cancels the agreement, they will be required to pay a $1 billion termination fee.
Dylan Field and Evan Wallace co-founded Figma in San Francisco about a decade ago. The startup introduced browser-based software design tools that enable software designers to collaborate in real time, avoiding the sometimes cumbersome process of saving and sending work to collaborators via a collection of disparate apps.
In its most recent funding round a year ago, the company was valued at $10 billion. Kleiner Perkins, Index Ventures, and Greylock Partners are among the venture capital firms that have invested in Figma.
According to the terms of the agreement, approximately 6 million additional restricted stock units will be granted to Figma’s CEO and employees, which will vest over the next four years. Adobe anticipates that the cash consideration will be financed with cash on hand and, if necessary, a term loan.