Adobe has announced that it will pay $20 billion to buy Figma, one of its main competitors in the digital design market.
Adobe said that the deal always did pay for 50% in cash and 50% in shares. Executives and workers of Figma will get 6 million additional selective shares over the course of four years following the deal’s closing in 2023.
But the deal isn’t final until regulators, Figma investors, and the agreement’s other terms all agree to it.
Figma’s tools are available and functional prototypes in a technology environment that has 4 million users. But Adobe is also a leader in the design industry and it is buying up similar companies around the world.
The acquisition is a game-changer and will help them reach their goal of integrated creativity. Adobe CEO Shantanu Narayen, also said that the company’s success was due to its ability to enter new markets.
Dylan Field, co-founder, and CEO of Figma replied by saying that Adobe’s knowledge and creativity in 3D, video, vector, image, and fonts will re-create end-to-end product design in the design browser. Allow the creation of new customer-centric platforms.
With the purchase of Figma, which became worth $10 billion after it got $200 million in June 2021. Adobe has not only got to get rid of a big competitor but also bought a fast-growing business.
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Adobe says that by 2025, Figma has a total addressable market of $16.5 billion. It is expected to add nearly $200 million in net Annual Recurring Revenue (ARR) this year. With a total ARR topping $400 million after 2022 and net dollar retention of more than 150%. With a positive operational cash flow and gross margins above 90%, this company has a solid foundation for future growth.