Why did Adobe buy Figma for ~$20B –

which is their biggest acquisition to date?

Lima Consulting Group

Since they already have products that do some of what Figma does, it was a curious purchase at a horrific valuation (unless you were lucky enough to have participated as a private investor in Figma).

But I think they really bought it to avoid another competitor to acquire it and start winning with creatives. The valuation, according to #pitchbook , was $10b last year (2021).

So this was an insane premium to buy an already competing and overlapping product suite, acquire more customers and remove the option value from competitors to enter Adobe’s dominance in selling to creatives. Overall, the right move, but a big price tag.

#Adobe overpaid. I don’t think the stock went down 12% immediately after the announcement due solely to their claim of “foreign currency headwinds”, the market didn’t like the price they paid. Prior to this, their largest acquisition was Marketo (4.75B) – so this puppy was 5x the size of their largest deal and it didn’t really come with any earth-shattering tech or new client base. If you use Figma, you already use the Creative Suite.

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