Adobe’s big Figma buy

Adobe has agreed to buy design software company Figma for US$20 billion in what will be the largest acquisition ever of a private software company (if the deal is approved). 

Why it matters: Adobe already boasts market dominance in the design software space, but this purchase stands to snuff out Figma, a burgeoning competitor, before it really took off.

Catch up: Figma allows collaborators to work on projects simultaneously and in real-time, and has a robust free tier which grew in popularity over the pandemic. 

  • In response, Adobe launched freemium versions of its marquee product Photoshop, but Figma remained a hit amongst students and big companies like Microsoft

Why it’s happening: Adobe shares have lost more than a third of their value this year as investors grew wary of its high cost of entry and more accessible competitors sprung up. 

Yes, but: The acquisition is reminiscent of Adobe’s previous purchases of competitors like Fireworks and Freehand. Haven’t heard of ‘em? That’s because they were shut down. 

  • But before that happened, the capabilities of the graphics editor Fireworks were integrated into Photoshop, and illustration tool Freehand was merged into Illustrator. 

For now, it looks as though Figma will continue to operate as a standalone product, but Adobe’s history of absorbing beloved products has given some in the design industry pause

Zoom out: None of this matters until the deal goes through. Given that the US has new directives to be more proactive in blocking potential antitrust violations, that’s no sure thing.