Adobe agreed to buy software startup Figma in a deal worth about US$20 billion (R350 billion) to help it expand its tools for creative professionals.
The deal announced by Adobe, consisting of a mix of half cash and half stock, would be the largest takeover of a privately held software company in history. Adobe shares fell about 7% in premarket trading.
Figma, which lets customers collaborate on software while it’s being built, has seen a spike in demand during the pandemic as more people work remotely. In recent years, the company has expanded its client base from software developers at major companies such as Airbnb, Google and Herman Miller to include people who create light games, maps and presentations.
Adobe, a Wall Street favorite for more than a decade, has been hit by a technical slump, seeing its stock lose more than a third of its value since the start of the year. Investors are increasingly skeptical of the dominance of Adobe’s line of software for design professionals, which accounts for about 60% of revenue.
Read: Adobe disappoints as competitive pressure mounts
San Francisco-based Figma was founded about a decade ago by Dylan Field and Evan Wallace. The company introduced browser-based software development tools that allow software developers to work together in real time, bypassing the sometimes clumsy process of saving and sending their work to colleagues using a collection of disparate programs. The company was valued at $10 billion in its last funding round a year ago. Figma is sponsored by venture capital firms Kleiner Perkins, Index Ventures and Greylock Partners.
Adobe also reported third-quarter results, with revenue up 13% to $4.43 billion. The results marked the third straight quarter of growth of less than 15%, weighed down by economic uncertainty and a strong dollar abroad. — Kathy Roof and Brody Ford, (c) 2022 Bloomberg LP