Adobe agrees to buy Figma in US$20b software deal

ADOBE agreed to buy software design startup Figma in a deal valued at about US$20 billion to help it expand tools for creative professionals.

The deal announced by Adobe, which is a mix of half cash and half stock, confirms an earlier Bloomberg report and would mark the biggest ever takeover of a private software company. Adobe shares fell about 7 per cent in premarket trading.

Figma, which allows customers to collabourate 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, Herman Miller and Kimberly-Clark - 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 1/3 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 per cent of its revenue.

San Francisco-based Figma was co-founded about a decade ago by Dylan Field and Evan Wallace. The startup 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 collabourators using a collection of disparate apps. The company was valued at US$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 per cent to US$4.43 billion. The results marked the third consecutive quarter of growth of less than 15 per cent, buffeted by economic uncertainty and by the strong US dollar overseas. BLOOMBERG

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