Venture Capital: Massive Payday For Figma Founders As Adobe Makes $20B Offer For The Design Startup
Figma is a leading Web-first collaborative design platform.
Adobe, (NASDAQ: ADBE) announced it will pay about $ 20 billion in cash and stock to acquire Figma, a collaborative design start-up that was valued at $ 10 billion in its last funding round in 2021. Figma creates cloud-based design software that is a competitor to Adobe’s XD program. The payment consideration of $ 20 billion comprises approximately half cash and half stock subject to usual adjustments.
Figma was founded by Dylan Field and Evan Wallace in 2012. Designers of interactive mobile and web applications can collaborate on the platform through multiplayer workflows, sophisticated design systems and an extensive developer ecosystem.
In a statement, Adobe said Figma had built a high growth business that featured gross margins of approximately 90% and positive operating cash flows. By 2025, the start-up would have a total addressable market of $ 16.5 billion, Adobe estimates.
Figma is expected to add approximately $200 million in net new ARR this year, surpassing $400 million in total ARR exiting 2022, with net dollar retention of greater than 150 percent, according to Adobe.
Figma is backed by VC firms including Index Ventures, Greylock Partners, Kleiner Perkins, Sequoia Capital, Durable Capital Partners, and Andreessen Horowitz. It has so far raised $ 333 million in venture funding as per Crunchbase.
The deal with Adobe is the largest acquisition of a US private, venture backed company this year. While Bloomberg described Adobe’s offer as “too good to refuse,” Adobe investors voted on the deal with their feet, sending the stock plunging today by nearly 17% as this is being written.
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