Before declaring Adobe’s biggest deal of 2018 was its $4.75 billion acquisition of Marketo, which it plans to buy Figma for $20 billion on Thursday.
Why pay more outside of Figma’s pricing comfort zone than its most recent private valuation? The simple answer is that it’s about taking a potential rival out of the market. Yes, Adobe XD is a similar product, but there may be more to this deal than just playing defense.
Be it — like IBM buying Red Hat for $34 billion in 2018 or Salesforce buying Slack in 2020 for nearly $28 billion — Adobe’s executive team saw a company that could fundamentally change their organization.
For IBM, the Red Hat acquisition is all about the hybrid cloud. For Salesforce and Slack, it’s the digital workplace, but both have seen a shift in their markets and have a huge offering for a company that’s key to getting ahead of it. Both also keep those pieces independent of the existing CEO (more on this later).
Adobe may have viewed the Figma deal as its company-changing moment, as it watched a key shift in the creative market focused on creating assets with tools like Photoshop and Illustrator to a firmer focus on creators and the collaborative nature of the design process. .
The former is what Adobe built most of its business on. The second is represented by Figma, a startup with visionary founders who want to change the way people think about design in a digital context, a change so important that an old-guard company is willing to spend heavily to catch up with the young and bring the two together. Ways of thinking together.
We spoke to the companies involved, Figma investors and industry analysts to understand why this deal fell through. The bottom line is that there are many reasons, but the best one is that Figma and Adobe are better together.