March 23, 2023
Adobe buys Figma

Adobe buys Figma for $20 Billion and subsequently cleared out its greatest rival in digital design making it the greatest news of digital creative technology, as per reports.

“Together, Adobe and Figma will reimagine the future of creativity and productivity, accelerate creativity on the web, advance product design, and inspire global communities of creators, designers, and developers,” claims Adobe. “The combined company will have a massive, fast-growing market opportunity and capabilities to drive significant value for customers, shareholders, and the industry.”

Figma is about the web, which is something Adobe and different adversaries have been attempting to rival. Adobe currently plans to consolidate its own local area with Figma, and almost certainly, will include packaging Figma items and administrations into Adobe Creative Suite sooner or later.

The third quarter came with Adobe confirming turnovers of $4.43 billion and earnings per share at $3.40, which surpassed forecasts. However, Adobe would be acquiring a loan to tide over the purchase of Figma and has downsized its forecast for the next quarter with a EPS of $4.50 and turnover at $4.52 billion.

Reasons For TakeOver

  1. The drowsy financial standpoint. Their portions were exchanging 10% lower than expected as Adobe had trusted that purchasing out a contender would give a push to its business.
  2. Figma grew faster than Adobe XD because the startup’s browser-based software design tools streamline the work of software designers — enabling them to collaborate in “real-time, bypassing the sometimes clumsy process of saving and sending their work to collaborators using a collection of disparate apps,” noted Bloomberg.
  3. During the pandemic, demand for Figma jumped and it added new software designers from big companies.
  4. Figma’s financial performance reflects its rapidly rising market share. As Adobe said, Figma “is expected to add approximately $200 million in net new [Annual Recurring Revenue] ARR this year, surpassing $400 million in total ARR exiting 2022.

Structure of Buy-Out

The buy-out has been divided into 50% cash and 50% stock options, and another 6 million will be allocated for restricted stock for Figma CEO and employees.

Upcoming Challenges

  1. AdobeXD is similar to what Figma offers but what will be the new product emanating from this acquisition is for the drivers of Adobe to decide. The challenge for Adobe would be to build the bridge between Figma and Adobe so that users can get the maximum from both products.
  2. Antitrust laws would also kick in, and it would be interesting to see how Adobe deals with those issues.

User’s Anxiety

As soon as the news came to the public there were mixed reactions from the natives. Some are welcoming this amazing highlight with their open arms whereas some are negligent to accept it.

Due to the complex interface that Adobe has and, overall, Adobe’s accountability to the users. Only stock brokers and investors are not the only concerned lot, but the internet has many users posting comments showing their anxiety about normal usage.

If you have any queries please feel free to post them in the comments section or anything you want to ask through mail contact.

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