Adobe to buy design company Figma for $20bn

Adobe has agreed to buy business-to-business design company Figma for approximately $20bn in half cash and half stock, as the software giant looks to bolster its creative tools offering.

San Francisco-based Figma, founded by Dylan Field and Evan Wallace in 2012, allows software developers and designers to collaborate remotely and design everything from slides for presentations to user interfaces on mobile apps.

The company raised $200mn in June last year at a $10bn valuation, with investment from Index Ventures, Andreessen Horowitz and Sequoia Capital.

Adobe shares were down more than 12 per cent in early trading.

The company is looking to tap into the millions of customers using Figma, which enjoyed a boom during the pandemic as staff worked remotely. Its clients include Twitter, News UK, Google and Netflix.

The merger will allow Figma to bring Adobe’s capabilities in imaging, 3D and video on to its platform, Adobe said.

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

In its third-quarter results announced on Thursday, Adobe posted net income of $1.1bn on revenues of $4.4bn, 13 per cent growth year-on-year or 15 per cent on a constant currency basis.

Figma expects to add around $200mn in net new annual recurring revenue this year, surpassing $400mn in 2022, it said.

“With Adobe’s amazing innovation and expertise, especially in 3D, video, vector, imaging and fonts, we can further reimagine end-to-end product design in the browser, while building new tools and spaces to empower customers to design products faster and more easily,” said Field, Figma’s chief executive.