Adobe and Figma ended their $20 billion takeover dream this morning after regulators signaled tough times ahead. Figma still receives a $1 billion stipend as part of the deal, and as co-design lead, he should stand up well.
But it could be a different story for Adobe. They knew that the product they offered to compete with this company, XD, was not very strong, and they really wanted this company. They sought to use their corporate influence to seize advantageous aspects of their core creator businesses by acquiring market leaders.
But ultimately, the regulatory hurdles proved too much for them, and after more than a year of back and forth in regulatory meetings, both companies realized it wasn’t going to happen and decided to exit. decided.
Adobe put on a brave face their official statement, but I can’t help but be deeply disappointed with this result. “Adobe and Figma have shared a vision to jointly redefine the future of creativity and productivity, and we continue to leverage the huge market opportunity and mission to change the world through personalized digital experiences. We remain in a good position to do so.”
It’s not clear that Adobe could be in such a strong position without Figma, but it’s certainly true that Adobe is willing to pay a hefty price to have it under its wing. They were never able to convince regulators that this was not a blatant power grab by wealthy corporations to use their economic clout to take over the market.
Margrethe Vestager, the EU’s chief executive officer for competition, has made it clear that she believes this is just such an attempt. her official statement. “By merging these two companies, the proposed acquisition would end all current and stop all future competition between the two companies. Our thorough investigation shows that this We found that this could lead to higher prices, lower quality, or less choice for customers.”
Ray Wang, founder and principal analyst at Constellation Research, says this is a major setback for Adobe, forcing it to return to its design collaboration tool, XD. “Adobe realized that in a world of Generative AI, the value is not in content creation, but in coordinating the work of content. This deal takes Adobe back two years and expands the reach of this important market. “This will give us an incentive to revamp XD to cover this,” he said.
Adobe General Counsel Dana Rao told TechCrunch in October that the company has largely dismantled its XD team and is fully committed to meeting its product needs with Figma. “We tried to get in there [collaborative design] I used XD but it failed. We abandoned the product. Basically, our annual revenue never exceeded $15 million to $17 million. “I think he’s down to five full-time employees, but they continue to work according to their contractual requirements,” he said. “So if we’re going to get into the product design space, for us it’s going to be acquiring Figma,” he said at the time.
On the plus side, the company now has a lot of cash on hand that it wouldn’t have had had the deal gone through, and it could probably put it to better use in a post-generation AI world. Brent Leary says. Co-founder and Partner of CRM Essentials. “This deal was announced before ChatGPT, and the world has changed dramatically since then. And this could mean that Adobe could take back his $20 billion and adjust and shape the content creation process post-ChatGPT.” It might actually work better because of its gender,” he said.
Wang said the company may also consider acquiring other collaboration startups such as Milo, web flow or invision, which raised $476 million, $335 million, and $356 million, respectively (according to Crunchbase data). None of this would make him a perfect successor to Figma, but perhaps he could give the company a head start in the collaboration space without the kind of scrutiny it received in the Figma acquisition attempt. Sho.
Figma, for its part, hasn’t stopped since this deal was announced, moving forward and planning as an independent company. In fact, this startup has employed 500 people since September 2022. Additionally, we have developed new features including tools. For developers And we have a generative AI layer on top of the popular FigJam whiteboard tool.
John Lilly, an early investor in Figma, said he was enthusiastic about the company remaining independent. “This team is a very special team. Over the last 10 years, they have completely changed the way design works. And this market for designing products is much larger and growing faster.” Lilly told TechCrunch.
If he’s right, that’s exactly why Adobe wanted to buy the company. Now, with Figma continuing to operate on its own and a startup full of the same potential it had before the acquisition was announced in September 2022, Adobe will need to rethink its design collaboration strategy, and perhaps at this point You basically have to start from scratch, not in the position you were in.
Source: techcrunch.com
