Adobe acquires Figma: Adobe announced that it would acquire design software company Figma for roughly $20 billion in cash and equity. Adobe’s stock fell 17%, marking the worst decline since 2010. Dylan Field, co-founder and CEO of Figma, will remain in that position after the deal is completed. David Wadhwani, president of Adobe‘s digital media division, will be his immediate supervisor.
Adobe acquires Figma: Key Points
- Adobe is paying close to 50 times revenue at a time when cloud software sales multiples are sharply declining from their record highs established last year.
- The forward multiples for the top cloud companies in the BVP Nasdaq Emerging Cloud Index have decreased from over 25 times revenue in February 2021 to just over 9 times revenue now.
- Adobe’s fiscal third quarter reports were also released. Adjusted earnings per share were $3.40, exceeding the $3.33 per share forecast from Refinitiv. It reported revenue of $4.43 billion, which was in line with analyst estimates.
Adobe acquires Figma: About Figma
- Figma was established in 2012 and makes cloud-based design software that enables real-time collaborative collaboration. It squares off against Adobe’s XD software.
- The company’s previous investment round in 2021 valued it at $10 billion.
- This year, Figma is anticipated to produce more than $400 million in annual recurring revenue, as per the sources familiar with the company’s finances, which include Index Ventures, Greylock Partners, and Kleiner Perkins. Adobe stated that Figma’s ARR will exceed $400 million by the end of 2022.
Important Takeaways for All Competitive Exams:
- Adobe CEO: Shantanu Narayen
- Figma co-founder and CEO: Dylan Field
- Adobe’s Digital Media Business President: David Wadhwani