Adobe has announced its intentions to buy online collaboration tool Figma for 20 billion dollars.
The half-cash/half-stock deal, which has yet to close, is a bold move by the company behind leading creative apps Photoshop and Premiere Pro – and will be Adobe’s largest acquisition to date.
But the shock announcement sent the company’s stock tumbling, with investors apparently punishing the company for the high price.
Adobe vs Figma
It appears the size of the deal led investors to downgrade Adobe’s stock to its lowest level in nearly three years. MarketWatch (opens in new tab) reported.
The Figma deal isn’t the only problem facing Adobe at the moment. Despite posting record revenue of $4.43 billion in its third quarter 2022 financial results, investors were disappointed by the company’s muted outlook for the next quarter.
But the company remains optimistic about the acquisition.
“Adobe’s greatness has been rooted in our ability to create new categories and deliver breakthrough technologies through organic innovation and inorganic acquisitions. The combination of Adobe and Figma is transformative and will accelerate our vision for collaborative creativity,” said Chairman and CEO Shantanu Narayen.
Founded in 2012, Figma has gone on to become one of the best interface design tools in its field. Practicing what they preached, its developers made it easy to use (and at least now it offers a free plan). Its cloud-powered, browser-based prototyping, built for online collaboration, proved popular with highly digitally minded UX professionals and students.
Indie software developer Nathan Manousos noticed (opens in new tab) that Adobe’s acquisition “shows how difficult it is to turn money into software. You’d think for $20 billion you could build something as good as Figma yourself, but you can’t. Software is art.”
Adobe XD was the closest the San Jose giant could come to a Figma alternative. But many found it less accessible, limited – it only runs on Windows and Mac – and less suitable for team collaboration. That it suffers from Adobe’s well-known complaint, lack of regular QoL updates, didn’t help endear it to users.
For a company of Adobe’s size, it’s far easier to simply add Figma to its own stable of industry standards video editing software and image editors. With its collaboration-focused design, the leading design tool will fit in nicely Creative cloud the ecosphere.
If you can’t beat ’em, buy ’em.
Whether this is the right decision – for Adobe, Figma and their users – is unclear.
The minds behind Sketch, UXPin and mockup software rivals may look at the merger with envy. And maybe hide a smile at Adobe’s falling stock.
But few will publicly echo open source developer Ricardo Cabello 3D design library Three.js that responded to the news with a Tweet (opens in new tab) which simply read: “Sell out.”