Even without Adobe, things don’t look too bad for Figma CB Insights estimates that Figma is still worth between $8.3 billion and $9 billionA failed acquisition often spells doom for the target company.
But despite its $20 billion takeover by Adobe not going through, there are reasons to think that Figma will be just fine.
That the online design company will get a $1 billion termination fee from Adobe will help soften the blow.
So, “no, startups, you’re not getting a breakup fee unless it’s a sizable enough deal where there is antitrust risk,” VC Ed Sim wrote on X.
But in the Adobe-Figma deal, where both companies knew that this risk was front and center, even a $1 billion fee seems only fair compared to the uncertainty ahead.
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 and Figma ended their $20 billion acquisition dream this morning after regulators signaled it would continue to be rough going.
Figma still gets a $1 billion consolation prize as part of the deal, and as the leader in collaborative design, should land on its feet just fine.
Adobe put on a brave face in their public statement, but it has to be deeply disappointed with this outcome.
Figma, for its part, has not stood still since the deal was announced, proceeding and planning as the independent company it is.
If he is right, that’s precisely why Adobe wanted to buy the company because it saw that too.
Adobe’s $20 billion mega-bid to buy rival Figma is now officially dead, after the companies said today that regulatory pushback in Europe had caused them to put an end to the acquisition plans.
First announced in September last year, the deal was always going to attract regulatory scrutiny due to the size of the transaction and the fact that it took one of Adobe’s major rivals out of the picture.
Irrespective of that outcome, the two companies were already facing significant headwinds in Europe.
As a result of all this, Adobe will now have to pay Figma a termination fee of $1 billion, which was contractually payable in the event of the transaction failing to attain regulatory clearance — or if it failed to close within 18 months of the acquisition’s announcement last September.
That 18-month stipulation hadn’t yet been reached, and no regulatory body had actually announced their final findings — but Adobe and Figma clearly saw no way through this, and with the DoJ also weighing up regulatory action, in the end it just made more sense to pull the plug on the deal entirely.
