Adobe, the software giant behind Photoshop and Illustrator, has been waiting for more than a year to close its $20 billion deal to buy Figma, a cloud-based design platform that allows users to collaborate on projects in real time. But the deal has been delayed by antitrust regulators in the US, Europe, and the UK, who are concerned about the potential impact on competition and innovation in the design industry.
Meanwhile, Adobe has shifted its attention to artificial intelligence, which it showcased at its annual conference in October 2023. Adobe launched Firefly, a suite of AI models that can generate images, videos, and audio based on user input. Firefly is part of Adobe’s vision to empower creatives with tools that can augment their imagination and enhance their productivity.
Figma was barely mentioned at the event, which raised questions about Adobe’s commitment to the acquisition and its future plans for the platform. “We still love Figma,” Adobe General Counsel Dana Rao said in an interview. “It’s pretty frustrating when you want to buy a company and 13 months later you’re still waiting to just see if you can or can’t,” he added.
Rao said that Adobe is confident that the deal will benefit its customers and the industry at large, and that it is working with regulators around the world to bring it to a successful conclusion. “Figma is a very strategic acquisition for us. It’s not just about adding revenue or adding users. It’s about adding capabilities and innovation to our platform,” said Scott Belsky, Adobe’s chief product officer and executive vice president for Creative Cloud.
However, some analysts and competitors are skeptical about the rationale and the timing of the deal. “A lot has changed since Figma was announced — at that time there was a view that Adobe was running out of growth and needed something new,” said Michael Turrin, an analyst at Wells Fargo. He said that Adobe’s revenue growth has been strong since then, driven by strong demand for its creative cloud products, especially during the pandemic.
Some of Figma’s rivals, such as Sketch and InVision, have also raised concerns about the deal, arguing that it would stifle competition and innovation in the design space. They have urged regulators to block or impose conditions on the merger, such as requiring Adobe to keep Figma as a separate entity or to open up its APIs to other platforms.
Adobe’s revenue grew 22% year over year to $4.1 billion in the third quarter of 2023. The company said that it expects the deal to close by the end of the year, but did not provide any specific guidance on how it would integrate Figma into its portfolio or how it would address potential antitrust issues.
Relevant articles:
-Adobe Is Focused on AI Rather Than Figma With Acquisition in Limbo, Bloomberg Businessweek, October 13, 2023
-Adobe’s $20 Billion Figma Deal Faces Antitrust Scrutiny in Europe, The Wall Street Journal, September 15, 2023
-Adobe’s Figma Acquisition Is a Big Bet on the Future of Design, Wired, August 18, 2023