Adobe just acquired its biggest threat

In the world of design, Adobe has reigned supreme for years.

Still, many analysts viewed design startup Figma as a serious challenger, thanks in part to its annual recurring revenue, which has been doubling year after year.

By announcing plans to acquire Figma for $20B, Adobe eliminated a budding rival and made a big bet on the future of design in the process, per The Verge.

Figma…

… was founded in 2012, when co-founder Dylan Field dropped out of Brown University to accept a grant from Peter Thiel.

His premise was simple: Design is a team sport, and browser-based apps make collaboration easier than desktop apps like Adobe Photoshop.

• By 2021, Figma’s rapid growth helped it reach “decacorn” status by securing $200m at a $10B valuation.
• Just over a year later, Adobe offered to pay 2x that to buy the company, betting that the future of design will be browser-based.

The deal will make Field the wealthiest recipient of the Thiel Fellowship, given his $2B+ stake in Figma.

This isn’t Adobe’s first acquisition

When finalized, Figma will mark the company’s third $1B+ acquisition since 2020. Critics argue this consolidation could lead to less innovation as Adobe absorbs competitors into its creative suite.

• In Figma’s case, Adobe CPO Scott Belsky says the company plans to give Field and team “complete autonomy.”

But Adobe still has competition. Canva, a popular graphic design tool, recently announced its own suite of tools that could eventually rival Adobe’s Creative Cloud.

That is, if Adobe doesn’t acquire them first.