Adobe to acquire Figma

23 September 2022
4 minute read

Adobe to acquire Figma

23 September 2022
4 minute read

Adobe have announced their intention to acquire a company called Figma – for $20 billion dollars (insert Dr Evil gif here!).

What does Figma do? 

That’s a great question and I have to admit, I’d never heard of them until this announcement. Figma is a design platform that enables easy, rapid collaboration between people at all stages of the creative process – improving efficiency of delivery among other things. They also have “Figjam”, a collaborative whiteboard for creative teams. 

It competes pretty directly with Adobe’s XD product, is used within several large international corporations, and is gaining traction with users – for example, the Figma iOS app consistently outranks Adobe XD in the App Store – so it makes sense that Adobe would look to acquire them. However, when you look at the numbers, it seems to make a little less sense.

Number crunching 

  • Adobe are prepared to pay $20,000,000,000 ($20 billion) for Figma 
  • Figma’s annual recurring revenue is $400,000,000 ($400 million) 

That means Adobe are paying 50x the annual recurring revenue! 

For comparison, the OpenText acquisition of Micro Focus is 2.2x the latter’s pro-forma trailing twelve months (TTM) revenue while Oracle paid $28.3 billion for Cerner, with an annual revenue of $5.8 billion, so approximately 5x. 

Paying that much for a relatively small company seems strange – so what’s behind it? Well, it seems it may well be down to Microsoft… 

Microsoft + Figma = Trouble for Adobe? 

In 2016, Microsoft acquired Xamarin, and their 350 people brought Figma into the Redmond ecosystem. It took hold and reached the point where CVP of Design & Research, John Friedman said

“Figma’s become, I would say, sort of the No. 1 common tool we use to collaborate across all of the design community in the community and beyond…[It’s] “really great at helping us collaborate at scale, and at global scale. I can collaborate with teams we have in India, China, Europe, Israel, and Africa” 

Why is this a problem? Well, Adobe and Microsoft have had a strong relationship for a couple of decades and, to some degree at least, it appears to be a factor in Adobe’s success – particularly since it was “reinforced” in 2015 by deeper integrations with Office 365. Seeing a competitive product take hold within a key partner – especially one with as much sway and influence as Satya Nadella’s re-energised Microsoft – has to have caused concern within Adobe. There may even have been a worry that Microsoft would acquire Figma, swiftly turning a partner into a competitor (again).  


As with all software company acquisitions, one must consider how they’re going to recoup their investment. Luckily there’s no need to worry about audits here but I would expect to see some (more) price increases within the next 12-18 months. Not only will they incorporate Figma into the existing Adobe XD product, but I also imagine they will start to add parts of the Figma technology across the CC suite – the “increased functionality” you’re then receiving will be the justification for an uplift on your Creative Cloud subscriptions. 

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