The Troubled Split: What the Adobe-Figma Breakup Tells us About Startup M&A in the Future

Venture capitalists and founders were already worried about exits after Visa’s $5.6 billion acquisition of Plaid in 2020 was canceled after a tough battle with regulators. Still, Figma and Plaid are only two examples of startups being impacted by antitrust and competition regulations in recent history. Yet, since the Adobe-Figma news broke this morning, discourse is already leaning towards how this will hurt startup liquidity; some VCs are even saying that large startup acquisitions are going to be off the table. But if you look at the data around startup M&A, that sentiment feels more like fear mongering than an actual reflection of what the startup exit market looks like. In fact, the vast majority of startup deals look nothing like the Figma or Plaid deals.

Adobe’s planned acquisition of design platform Figma for a whopping $20 billion has been called off, citing concerns from the European Union and the United Kingdom regarding regulatory compliance. This development adds to the growing concerns about how stricter competition rules imposed by governments around the world could negatively impact the exit opportunities for startups.

Venture capitalists and entrepreneurs alike were already anxious about the fate of startup exits after the failed $5.6 billion acquisition of Plaid by Visa in 2020, which faced significant pushback from regulators. And the recent appointment of Lina Khan, a well-known advocate for antitrust policies, as the chairperson of the Federal Trade Commission only intensified these concerns.

However, it’s important to note that Figma and Plaid are just a couple of examples of startups that have been affected by antitrust and competition laws in recent times. Despite the initial uproar following the news of Adobe’s decision to scrap the Figma deal, discussions have quickly turned to how this could potentially hurt startup liquidity, with some VCs even predicting that major acquisitions by large companies will no longer be a viable option.

But let’s take a closer look at the data surrounding startup mergers and acquisitions. The prevailing sentiment of doom and gloom seems to be driven more by fear-mongering rather than an accurate portrayal of what the startup exit market truly looks like. In reality, the vast majority of startup deals bear no resemblance to the highly publicized Figma and Plaid acquisitions.

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Dylan Williams

Dylan Williams is a multimedia storyteller with a background in video production and graphic design. He has a knack for finding and sharing unique and visually striking stories from around the world.

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