December 5, 2023

When Adobe announced it is Invest $20 billion After the acquisition of Figma in September 2022, it didn’t take long for people to start seeing it as a blatant attempt to drive a competitor out of the market.

That’s curious indeed, especially considering that the offer is double the company’s most recent valuation, worth roughly 50 times Figma’s revenue. It’s hard to argue that the deal wasn’t an act of violence by Adobe, the kind of corporate consolidation regulators are trying to block after years of letting the tech giant run rampant, acquiring startups that could eventually erode. their market share.

Adobe’s proposed deal with Figma has certainly drawn the attention of regulators, but regulators aren’t too optimistic. already, Ministry of JusticeCMA—— UK competition regulator – and U.S. The deal is under long, serious scrutiny, and it’s not too much of a stretch to think that either of them could call it off as anti-competitive.

“We are still in the preliminary stages of the regulatory process and are in constructive discussions with the CMA, EC and DOJ on the business, market and positive economic impact that this transaction will have to support the (customer positive) reviews,” said an Adobe spokesperson. Tell TechCrunch+.

It may seem obvious even to a casual observer Adobe is trying to take on potential rivals Shutting down the board, a move that could stifle competition and innovation, isn’t a great mix for design software consumers.

To be sure, the deal will give Adobe a fresh look as it tries to forge its own alongside design tool rival Adobe XD. But XD never got much traction, which explains why the company was willing to spend more than $20 billion to get the best of it.

exist Interview with TechCrunch Disrupt Last fall, Figma co-founder Dylan Field said the two companies would indeed be better off working together. But of course he has 20 billion reasons to think so.

When asked to explain why he decided to join forces with a company his marketing team had been portraying as its biggest competitor, he saw two companies bringing together creativity and design, and he didn’t see the resources to go in that direction. Own, at least not for a long time. “If we want to get into all these more productive areas, it’s going to take a lot of time. Being able to do that in the context of Adobe, I think, helps us tremendously, and I’m really excited about that.” Excited,” Field said.

But with regulators watching closely, it’s not hard to imagine that happening. But even so, will the deal be a net profit for Figma and its backers? Let’s talk about it.