Adobe agrees to buy Figma in $20 billion software deal

The deal announced by Adobe, which is a mix of half cash and half stock, confirms an earlier Bloomberg report and would mark the biggest ever takeover of a private software company. Adobe shares fell about 7% in premarket trading.

Figma, which allows customers to collaborate on software as they build it, saw demand jump during the pandemic while more people worked remotely. The company expanded its customer base in recent years from software designers at big companies like Airbnb Inc., Google, Herman Miller Inc. and Kimberly-Clark Corp. — to also include individuals building lightweight games, maps and presentations.

Adobe, which had been a Wall Street favorite for more than a decade, has been pummeled in the tech downturn, seeing its shares lose more than a third of their value since the start of the year. Investors have become increasingly skeptical about the dominance of Adobe’s line of software for design professionals, which makes up about 60% of its revenue.

San Francisco-based Figma was co-founded about a decade ago by Dylan Field and Evan Wallace. The startup introduced browser-based software design tools that allow software designers to work together in real-time, bypassing the sometimes clumsy process of saving and sending their work to collaborators using a collection of disparate apps. The company was valued at $10 billion in its last funding round a year ago. Figma’s backers include venture capital firms Kleiner Perkins, Index Ventures and Greylock Partners.

Adobe also announced third quarter results, with revenue jumping 13% to $4.43 billion. The results marked the third consecutive quarter of growth of less than 15%, buffeted by economic uncertainty and by the strong dollar overseas.

This story has been published from a wire agency feed without modifications to the text. Only the headline has been changed.

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