Adobe will pay a termination fee of US$1bil to Figma. — Reuters
NEW YORK: Adobe shelves its US$20bil deal for cloud-based designer platform Figma, pointing to “no clear path” for antitrust approval in Europe and the United Kingdom for what would have been among the biggest buyouts of a software startup.
The cash-and-stock deal, announced in September last year, was the latest to draw tough scrutiny from regulators worried about Big Tech acquisitions that boost the market power of dominant companies or involve startups seen as nascent rivals.
Adobe will pay a termination fee of US$1bil to San Francisco-based Figma, whose web-based collaborative platform for designs and brainstorming is used by Uber, Coinbase, Zoom Video and many other firms.
Figma has expanded its team from 800 to 1,300 people in the past year, and is expected to grow its annual recurring revenue by 40% to over US$600mil this year, a source familiar with the matter said.
The company has also been cash-flow positive, an important metric for public market investors to evaluate potential initial public offering candidates.
Both Figma and Adobe have benefitted from the generative artificial intelligence craze, as Figma launched new features as it expanded into software development, and Adobe has released generative photo tools such as Adobe Firefly.
The United Kingdom’s Competition and Markets Authority said the deal would harm innovation for software used by the vast majority of its digital designers, echoing similar concerns from the European Union on the potential reduction of competition. — Reuters
