Winners and Losers of the Voided $20B Adobe-Figma Deal

digiflowz Business Blog Post

[ad_1]

The Gist

Acquisition aborted. Adobe and Figma cancel their $20B deal due to regulatory hurdles, altering market dynamics.
Figma’s future. Figma retains independence, ensuring continued innovation and autonomy in design.

Adobe’s adaptation. Adobe’s expansion and collaborative creativity vision hit, yet opens possibilities for future partnerships.

It’s over. Officially.

More than 15 months after Adobe announced its intention to acquire design platform Figma, the companies announced Monday, Dec. 18 they entered into a mutual agreement to terminate the deal as European Commission and the UK Competition and Markets Authority regulators offered “no clear path” to a finished deal. Adobe announced the deal Sept. 15, 2022, for a mix of cash and stock consideration to the tune of $20 billion.

“Adobe and Figma strongly disagree with the recent regulatory findings, but we believe it is in our respective best interests to move forward independently,” Shantanu Narayen, chair and CEO of Adobe, said in a statement. “While Adobe and Figma shared a vision to jointly redefine the future of creativity and productivity, we continue to be well positioned to capitalize on our massive market opportunity and mission to change the world through personalized digital experiences.”

Here’s an early look at the potential winners and losers from the fallen deal.

Winners in the Adobe-Figma $20 Billion Collapse

Competitors in the Design Software Market

The deal falling through prevents a major consolidation in the design software market, ensuring that smaller players and Adobe’s direct competitors can continue to thrive without facing an overwhelming challenge from a combined Adobe-Figma entity. This maintains a healthier level of competition and innovation in the market.

Darren Hood, UX designer, told CMSWire when the Adobe-Figma deal went down, “Adobe has, once again, eliminated a major competitor,” reflecting on the potential market impact had the acquisition proceeded.

Related Article: How Does Adobe’s $20B Acquisition of Figma Impact UX Designers?

Figma’s Independence and Innovation

Figma retaining its independence ensures that it can continue to foster its unique culture of innovation and collaboration, which has been key to its success. This independence is crucial for maintaining the pioneering spirit and agility that often gets diluted in large corporate structures, allowing Figma to continue leading in its niche.

Dylan Field, Figma’s CEO and co-founder, said when the acquisition broke last year, “We plan to continue to run Figma the way we have always run Figma,” emphasizing the importance of maintaining their operational autonomy. That’s definitely true now, something a lot of UX designers want. It simply has a large community of followers:

As promised, Here’s a Google drive link containing about 40 videos on UI/UX design on Figma

Please share with your friends too.

Coming next, a complete pack for UI/UX designers containing everything you need as a beginner including books, resources etchttps://t.co/tHugVy6lPQ

— Vello (@vello01) April 26, 2021

Adobe’s Commitment to Stay in Touch With Figma

But maybe a lighter partnership down the road would be good for UX designers? Users of each platform could see partnerships down the road, according to Adobe.

“Figma has built an incredible product design platform, and I am confident in their continued innovation and growth after spending more than a year with their team and community,” David Wadhwani, president, digital media business, Adobe, said in a statement. “I have been impressed with Dylan and his incredible team at Figma and will look for ways to partner to delight joint customers in the future.”

Related Article: Adobe Acquires Figma for $20B

UX/UI Designers Preferring Diversity of Tools

Designers and creative professionals benefit from a diverse ecosystem of tools that cater to different needs and workflows. The preservation of Figma as an independent entity ensures that this diversity remains, offering designers the freedom to choose tools based on their specific preferences and requirements.

Tony Brinton, founder and principal at Brinton Design and director of digital at OTTO Brand Lab, highlighted in an earlier interview with CMSWire Figma’s unique appeal, saying, “Figma delivers a collaborative design experience that UX/UI professionals…have been wanting,” indicating the distinct value Figma offers in the market.

Losers in the Adobe-Figma $20 Billion Collapse

Adobe’s Market Expansion Goals

Adobe’s ambition to significantly broaden its portfolio and cement its leadership in the digital design space by acquiring a rising star like Figma is thwarted. This cancellation denies Adobe the opportunity to rapidly integrate Figma’s innovative technologies, potentially slowing down its strategic expansion and its vision to reshape collaborative creativity.

Adobe’s Narayen envisioned of the deal, “The combination of Adobe and Figma is transformational,” suggesting the strategic importance of the acquisition for Adobe. And $20B is $20B. That alone should tell you how much Adobe wanted Figma. The deal would have been four times larger than Adobe’s current biggest acquisition: Marketo for $4.75 billion in September of 2018.

Customers Anticipating Integrated Solutions

Users who were anticipating a seamless integration of Figma’s collaborative features with Adobe’s comprehensive suite of creative tools face disappointment. Such integration promised to create a more unified and powerful platform, potentially enhancing productivity and creative possibilities for users across various industries.

Brian Nemhauser from Propel, Inc., alluded to the advantages of this integration for Adobe users, which are now unfulfilled due to the deal’s cancellation.

“Figma has become the clear standard for screen design, and this move allows Adobe to continue to be the one-stop shop for creative pros and for users to get everything they need for one price,” Nemhauser told CMSWire about the deal. “Acquisition has been a crucial component of Adobe’s business from the days of Photoshop and After Effects to Macromedia and now Figma. Each of those moves brought new expertise and capabilities to Adobe and resulted in significant new value for users and the company.”

Related Article: What Is User Experience (UX) Design?

Adobe’s Strategic Vision for Collaborative Creativity

Adobe’s strategic plan to redefine the landscape of collaborative digital creativity and productivity by leveraging Figma’s unique capabilities is significantly set back. This could impede Adobe’s ability to innovate at the pace and scale envisioned, potentially affecting its competitive edge in the rapidly evolving digital design market.

Narayen’s ambition for the merger to “accelerate our vision for collaborative creativity,” underscores the potential transformative impact the acquisition was expected to have.

Unsure Fate in the Adobe-Figma $20 Billion Collapse

The Design Software Market as a Whole

The market avoids the risks associated with over-consolidation but also misses out on the potential innovations and advancements that could have stemmed from the synergies of Adobe and Figma’s combined expertise and resources. This leaves the market dynamics relatively unchanged, but possibly less dynamic in terms of revolutionary product offerings.

Sheila Mahoutchian of Forrester highlighted the transformative potential of such mergers, which remains unrealized in this scenario.

“Figma’s best-in-class collaboration workflow platform has changed the landscape for design tools, moving the world of design from individual contributors to collaboration-based team enablement,” Mahoutchian told CMSWire when the deal broke. “We’re looking forward to learning more on how Adobe will integrate these trends and learnings into its expansive suite of design tools.”

Regulatory Environment

This scenario underscores the effectiveness and influence of antitrust regulations in preserving market competition. However, it also highlights the complex balance between regulating to prevent monopolies and allowing market-shaping mergers that could drive innovation and offer new value to users.

The potential antitrust lawsuit by the DOJ, as we reported earlier, played a pivotal role, naturally, in shaping the outcome of this high-profile tech industry deal.