Why did Adobe buy Figma for a whopping $20 billion? Top 3 reasons

Figma has been heavily competing with Adobe’s XD products in recent years, it’s big news in the design and development world.

In Dec 2015, Figma raised a $14 million Series A at a $48 million post-money valuation. This was at $0.20 per share, and there were ~242.2 million shares.

In Jun 2021, It raised $200 million in a series E round that valued the company at $10 Billion.

At an average YOY growth for 6 years between 2015 valuations and 2021, It should result in $11.6 Billion to $12 Billion (I know these numbers are based on average revenue and user acquisition of the past 6 years and private equity valuations would vary).

But why did Adobe pay $20 Billion? and as half cash and half stock deal

These are the 3 main reasons which would have made Adobe take a big decision.

1. Figma is community-led, The NPS (Net promoter score) of Figma is much higher than most companies due to multiple factors and currently stands with 4 million users.
2. Usability: It’s fun and like a game, with features and feasible options like easy, collaboration, fig jam, lightweight platform, and more. Who wants to on such an intuitive experience?
3. Free: Figma can be used free for most of the features and more visible options to educators and students. This great experience and vision would have fallen numbers on Adobe’s products in the last few years.

Now Adobe might start experimenting with different pricing models and adding Adobe products for motion designs into the plugin list.

Although on a note, Figma’s CEO Dylan Field says the company will remain independent despite Adobe’s acquisition of the smaller design platform.

CEO also added, There are currently no plans to change Figma’s pricing, and the platform will continue to be free for education.

So designers and other users no need to worry about seeing notifications like “You have 87 free rectangles left in the free trials”.

My social media feed has been showing so many emotions since the Figma acquisition. There are a lot of times when companies buy another company, but this was one that evoked so much emotion in the communities. (Attached below)

Let me know your views on the acquisition in the comments.

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Here are some of the reactions post-Figma Acquisition news