Adobe has agreed to buy software design start-up Figma in a deal valued at about US$20-billion (R350-billion) to help it expand tools for creative professionals.
The deal announced by Adobe, which is a mix of half cash and half stock, would mark the biggest ever takeover of a private software company. Adobe shares crashed more than 17% in intraday trading as investors took a dim view of the price tag.
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, Google and Herman Miller to also include individuals building lightweight games, maps and presentations.
Adobe, which had been a Wall Street favourite for more than a decade, has been pummelled 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 sceptical about the dominance of Adobe’s line of software for design professionals, which makes up about 60% of its revenue.
Read: Adobe disappoints as competitive pressures grow
San Francisco-based Figma was co-founded about a decade ago by Dylan Field and Evan Wallace. The company 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. — Katie Roof and Brody Ford, (c) 2022 Bloomberg LP