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Home BUSINESS Adobe agrees to buy Figma, a design platform, for $20 billion

Adobe agrees to buy Figma, a design platform, for $20 billion

Adobe, one of the world’s largest software companies, said on Thursday it would acquire design platform Figma for $20 billion, a deal that comes amid a slump in merger activity in the tech world.

Figma, which was founded in 2012, has raised more than $332 million in funding, according to Crunchbase, and was valued at $10 billion in 2021. The company allows multiple people to collaborate on design projects on the same files at the same time.

“It’s happening in a market that has cooled off for tech companies in general,” said Danny Rimer, a partner at venture capital firm Index Ventures, Figma’s biggest backer. “It’s more a reflection of how well Figma is doing as a business, how much thought leadership the combination of Adobe and Figma will have, and the strength of the management team.”

Adobe’s purchase of Figma coincides with a cooling off in trading and a decline in tech company valuations as recession fears mount. The value of US deals has added about $1.2 trillion so far this year, up from $2 trillion in 2021, according to data firm Dealogic.

Federal Reserve officials have affirmed their commitment to reduce inflation by continuing to raise interest rates, a prospect that has spooked investors. The big-tech Nasdaq index is down 26 percent since the start of the year and had its worst day since June 2020 on Tuesday.

Adobe shares fell nearly 17 percent on Thursday and are down 45 percent this year.

“Adobe’s greatness is built on our ability to create new categories and deliver cutting-edge technologies through organic innovation and inorganic acquisitions,” Shantanu Narayen, Adobe CEO, said in a statement. “The combination of Adobe and Figma is transformative and will accelerate our vision of collaborative creativity.”

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