“If not for him, for the value of the asset that’s being brought with him.”
(Recent tweets, perhaps, aside.) “Clearly they want him to stick around,” says Wolfe Research analyst Alex Zukin, who called the timing and price of the deal more surprising than its substance. Field, 30, has run Figma since 2012 and carries credibility with customers and the broader designer community, they say.
To do that, Adobe will likely look more to the model of LinkedIn, which Microsoft acquired for $26 billion in 2016, and which Microsoft left running largely independently in years since under former CEO Jeff Weiner (incidentally, a mentor of Field’s).Ī big part of that is retaining Field and his top lieutenants, and Adobe is paying a premium to do so. Beyond just taking a potential existential threat off the table, buying Figma also creates an opportunity to grow that business by integrating it into Adobe’s wider user base.
#FIGMA STOCK SOFTWARE#
(Wallace left the company in 2021).Īdobe’s stock is down more than 20% since the announcement, evaporating $29 billion in market capitalization and helping cause several prominent analysts to cut their ratings.Īdobe’s reasons for doing the deal, even at such a rich price, are simple, analysts say: The move pulls Adobe into the cloud, an area where it’s historically struggled to gain traction, while reaching a new cohort of design software customers. It added that “with gross margins of approximately 90 percent and positive operating cash flows, Figma has built an efficient, high-growth business.The proposed acquisition, which the companies said they expected to close in 2023, has provoked backlash among some Adobe investors concerned about its cost - 50 times Figma’s expected revenue for the year - and among some Figma fans in the design community, who turned to memes and reshared a Field tweet from 2021 that “our goal is to be Figma and not Adobe.“ The deal will make Field and cofounder Evan Wallace billionaires. The company is expected to add approximately $200m in net new ARR this year, surpassing $400m in total ARR exiting 2022, with best-in-class net dollar retention of greater than 150 percent.” It’s picking up a fast-scaling business.”Īs noted by Adobe: “Figma has a total addressable market of $16.5bn by 2025. But Adobe is doing more than just taking out a big competitor. Ingrid Lunden wrote in a publication for TechCrunch that “a $20 billion price tag is a sizable jump for Figma, which was last valued at $10 billion in June 2021, when it raised $200m. Already owning hallmark products such as Adobe Photoshop Illustrator and Acrobat Pro, the firm can only benefit in adding to the list of products it provides so that its clients can make use of adjacent services.įigma’s product provides a graphics design interface which it says is easy to use and implement by its customers. The combination of Adobe and Figma is transformational and will accelerate our vision for collaborative creativity.” Benefits of the mergerĪdobe appears to be expanding into providing multiple products via its cloud platform. Shantanu Narayen, chairman and CEO at Adobe said in the statement: “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 company expects the transaction to be half cash and half stock purchases, funded by cash on hand and borrowings. It added that that 6 million additional restricted shares will be granted to CEOs and employees of Adobe subject to a four year vesting period.
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