XD’s tiny recipe explains why Adobe bought Figma – APK Games

Last Thursday (15th), the Adobe announced the purchase of Figmaa startup that develops collaborative online design tools, for nothing less than $20 billion. For Adobe, the acquisition means “reimagining the future of creativity and productivity”. According to data from Bloombergthis is the largest deal ever made by a privately held software company.

Figma’s real focus is on developing collaborative projects facilitated by the “magic” of sharing. Let me explain: the company’s technology allows everything in a design project to be done through the browser, without necessarily having two teams working on the same idea in separate files.

Although Adobe also started to offer its solutions in this same format, there were still many bottlenecks that prevented it from providing work as fluid as its competitor. Allied to this, the company has seen all the attention turn to Figma in recent years, while Adobe XD has sunk.

In fact, some rumors were already airing that the purchase could happen, so the news was already taken for granted. However, for its investors, the $20 billion value paid by the startup would have been far above what it was actually worth.

For Shantanu Narayen, CEO of Adobe, the merger of the two companies is “transformative and will accelerate our vision of collaborative creativity.” Finally, the company confirmed that Dylan Fieldco-founder and CEO of Figma, will remain with the company and will continue to lead the company’s business.

Adobe XD Revenue May Explain Figma Purchase

As soon as Adobe announced the purchase, its shares in Nasqad began to plummet and fell more than 17%. This, of course, is the result of the distrust of the market, which was shocked by the amount paid by the startup.

In addition to worrying investors, the acquisition of Figma also raised eyebrows from regulators. For them, the merger of the two companies cannot harm competition.

In an interview with axios, Dana RaoAdobe’s general counsel and chief financial officer, defended the price paid and explained, in three reasons, why the deal could shape the future of companies.

Adobe XD was doomed to fail

After seven years of investing in a design tool, Adobe XD was generating $15 million annually in revenue independently — up from $400 million generated by Figma.

According to Rao, XD was “in the fridge” and had a staff of just 20 employees, while its main competitor has more than 800.

For him, Adobe needs to rethink the cloud

Rao says Adobe’s focus is on bringing its solutions to the browser. According to him, this deal with Figma could help the company “reimagine everything”.

A first bet in this new market is Adobe Express, but Rao said Figma will help Adobe reinvent itself for the next era of design.

Regulators shouldn’t worry

Although Figma is a direct rival to Adobe XD, the executive says that its acquisition should not raise antitrust concerns, that is, the right to competition. “We think they [reguladores] go check it out and we feel good about the facts,” Rao said.

With information: Adobe, axios and Bloomberg