Adobe agreed to buy cloud-based designer platform Figma at $20 billion on Thursday, triggering investor concerns about the high price tag and dropping the Photoshop maker’s market worth by more than $30 billion.
The cash-and-stock acquisition, the biggest purchase of a privately-owned software startup, gives Adobe ownership of a company whose web-based collaborative platform for ideas and brainstorming is popular among internet firms including Zoom Video Communications (ZM.O), Airbnb Inc and Coinbase (COIN.O).
Adobe CEO Shantanu Narayen called Figma’s business “the future of work” and said integrating it with Acrobat and Fig jam would be “tremendous.”
Figma’s $20 billion exit was a victory for Index Ventures, Greylock Partners, and Kleiner Perkins.
“Figma users will have access to Adobe’s photography, graphics, and video technology. Figma offers its expertise in browser-based development “Kleiner Perkins partner Josh Coyne invested in Figma in 2018 and expects a 100x return when the deal complete.
Adobe is one of the most acquisitive Silicon Valley companies, buying multiple startups to defend market dominance against Microsoft.
Before Figma, it bought Marketo for $4.75 billion in 2018.
It has also bought several firms in the previous 24 months to focus on collaboration solutions, including Frame.io, ContentCal, and Workfront.
San Francisco-based Figma will continue to be managed by co-founder and CEO Dylan Field. Either business can cancel the arrangement for $1 billion.
Adobe’s fourth-quarter revenue prediction of $4.52 billion was below analysts’ $4.58 billion estimate, Refinitiv data shows.
Stronger dollar and greater costs lowered third-quarter earnings by about 6%.