Adobe acquiring Figma for $20 Bn smacks of overpaying, right?
This is acquisition price is 50x of current Figma ARR of $400 Mn
Before you yell “over-paid” or “great deal”, let’s SWOT this:
S:
• Time spent on mobile/digital is growing 11% YoY
• From 2019 to 2022, the average MAU of the top 500 apps has growth 50% to 100 Mn (from 77 Mn)
• Daily average time spent on mobile in 2021 was 4 hours and 48 minutes. It has grown 30% since 2019.
W:
• Is this Adobe Xd throwing in the Xd towel? What stops a repeat at Figma, post acq?
• Culture. Culture. Culture.
O:
• In a 2021 market, Figma shareholders wouldn’t have considered anything less than an IPO. The lukewarm IPO market created conditions for a potential deal to be tabled at al.
• Teams are more distributed. Collaboration tools with a remote-first DNA will win.
T:
• Mega-acquisitions are more often failures than not.
Can Adode learn from Figma without changing Figma’s culture?
• For those here too young to remember, here’s a simple google query “adobe macromedia “
Flash went from being installed on 99% of browsers in 2011 to 0% (zero) by 2017. Contrary to popular opinion, neither Apple nor Abobe killed Flash.
HTML5 (and H.264) took away the need for a closed-source plug-in.
But, I digress.
Bottomline:
• Has Adobe learnt enough from it’s Macromedia acq ($3.4 Bn in 2005) to allow Figma to flourish?
• Has Adobe learnt enough to leave Figma be, and not force-fit it into their Creative Cloud bundle?
Of course, if Adobe is a stock you want to include in your portfolio, then today’s 17% dip (back to 2010 prices) might just be the kicker you are looking for.
Sources:
https://go.sensortower.com/rs/351-RWH-315/images/mobile-app-market-outlook-2022.pdf
https://www.blog.udonis.co/mobile-marketing/mobile-apps/mobile-app-market-forecast
https://www.cnbc.com/2022/09/15/adobe-to-acquire-design-platform-figma-for-20-billion.html
https://www.techspot.com/article/2413-adobe-flash/