Adobe to Buy Online Design Platform Figma in a $20 billion Deal

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Adobe to Buy Online Design Platform Figma in a $20 billion Deal

Updated on Friday, September 16, 2022

Adobe announced a $20 billion deal to acquire Figma, an online design platform that allows multiple people to collaborate on design projects in the same files at once..

Overview

Adobe, one of the world’s largest software companies, announced on Thursday that it would buy the online design platform Figma in a deal worth $20 billion. This announcement has come amid a drop in merger activities in the tech world.

According to Crunchbase, Figma has raised more than $332 million in funding after it was founded in 2012, and was valued at $10 billion in 2021. The company’s design platform allows multiple people to collaborate on designing projects in the same files at once.

“It’s happening in a market that has cooled down for technology companies as a whole,” said Danny Rimer, a partner at the venture capital firm Index Ventures, Figma’s biggest backer. “It’s more a reflection of how well Figma is doing as a business, how much thought leadership the combination of Adobe and Figma will have and the strength of the management team.”

Adobe acquiring Figma coincides with cooling in deal-making and decreased valuations for technology companies as recession fears build. The value of deals in the United States has totalled about $1.2 trillion so far this year, compared with $2 trillion in 2021, according to the data firm Dealogic.

Federal Reserve officials have affirmed their commitment to bringing down inflation by continuing to raise interest rates, a prospect that has spooked investors. The tech-heavy Nasdaq index has fallen 26 percent since the beginning of the year and had its worst day since June 2020 on Tuesday.

Shares of Adobe slipped nearly 17 percent on Thursday and have fallen 45 percent this year.

“Adobe’s greatness has been rooted in our ability to create new categories and deliver cutting-edge technologies through organic innovation and inorganic acquisitions,” Shantanu Narayen, Adobe’s chief executive, said in a statement. “The combination of Adobe and Figma is transformational and will accelerate our vision for collaborative creativity.”

News Source Link: https://www.nytimes.com/2022/09/15/business/adobe-figma-deal.html

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