Design giant Adobe is buying online digital design and collaboration tool Figma in a cash and stock deal worth $20bn. Described as a bid to cement Adobe’s position as a provider of software to support the “future of work”, the news came as a shock to investors, sending the company’s share price plummeting and wiping $30bn off its value.
Founded in 2012, Figma became popular during the Covid-19 pandemic as more people were forced to work remotely. It has extensive collaboration tools and is browser-based, making it easier to deploy to a wide range of locations and set-ups.
It is used by several tech companies including Zoom, Coinbase and Microsoft. Tens of thousands of employees inside Microsoft, including designers, data scientists, developers and marketers use Figma daily as part of their workflow.
Adobe is betting on being able to integrate Figma’s collaboration tools and browser-based platform in a “future of work” play that will change how design and development teams operate as hybrid working becomes standard in the post-Covid-19 world. This could include Adobe taking more of its own products into the browser.
Figma will remain independent of Adobe
Figma is expected to remain independent of Adobe once the merger is finalised in 2023 and will still be run by co-founder and CEO Dylan Field, who will report directly to Adobe Digital Media VP David Wadhwani. “Adobe is deeply committed to keeping Figma operating autonomously,” Field said. “We plan to continue to run Figma the way we have always run Figma — continuing to do what we believe is best for our community, our culture and our business.”
That doesn’t mean there won’t be collaboration between the businesses. Adobe says it plans to draw on the product portfolios of both companies to “power the future of work”, which will include “bringing together capabilities for brainstorming, sharing, creativity and collaboration and delivering these innovations to hundreds of millions of customers”.
This will include moving more services online to meet the demands of an increasingly distributed workforce. The company wrote: “Creators are currently challenged with making an ever-rising volume of content in close collaboration with an increasing number of stakeholders. The web has become a ubiquitous platform that is making it easier for teams to create together.”
Adobe says it will use the web-based multi-user capabilities developed by Figma to accelerate the planned move of Adobe Creative Cloud apps onto the browser to make the “creative process more productive and accessible to more people.“
A shift to the browser
“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 in a statement. “The combination of Adobe and Figma is transformational and will accelerate our vision for collaborative creativity.”
The deal is expected to see Figma's total addressable market reach $16.5bn by 2025 across design, whiteboarding and collaboration with further increases to Adobe earnings as a result of the collaboration.
"Like many of you, I grew up using Adobe software and it was a critical part of my personal creative journey," Field said. "It is an incredible opportunity and honour to help Adobe build the next generation of creative tools. Especially in a time when AI-generated models make us question the role of human creativity, this opportunity is also a huge responsibility. I look forward to the years ahead and continuing to serve this amazing community."
Users have often cited the rising costs of an Adobe Creative Cloud subscription as a reason for switching to Figma, which includes a free tier plan. It isn't clear what impact the merger will have on the cost of Figma, although Field said there are currently "no plans to change Figma's pricing" and that its free offering for education providers will continue
"Figma's education offering was a critical part of our conversations and Adobe is completely aligned on growing the number of designers, developers and creatives in the world," the Figma CEO explained.
Adobe has a reputation for buying up companies to defend its market share. Prior to the Figma purchase, its most expensive deal was the $4.75bn it paid for marketing software company Marketo in 2018.
In the past two years, it has focused its acquisitions on collaboration and "future of work" plays including video collaboration tool Frame.io, social media marketing start-up Content Cal and the collaboration tool Workfront.