As design software company Figma eyes a much-anticipated public offering, investors say the failed $20 billion deal with rival giant Adobe may have been a blessing in disguise.
In 2023, Adobe abandoned plans to acquire Figma, following antitrust pushback in the UK and EU. The deal also led to the ire of some in the design community at the time, weary of price hikes and slowing innovation.
Less than two years later, Figma filed to go public on July 1.
Business Insider spoke with three investors, who asked to remain anonymous during the quiet period before Figma’s initial public offering. They said that the abandoned deal reinvigorated innovation at Figma, which now faces a fresh wave of opportunity thanks to AI.
“I always believed that the company had a chance to build a much bigger business than the Adobe deal,” one Figma investor told BI.
When the deal fell apart and Figma collected a $1 billion breakup fee, it represented a “crucible moment,” that investor said.
In addition to offering buyouts and resetting its valuation, Figma reinvigorated its products, the investor said. Figma launched four new products at its annual Config conference in May, doubling its catalog.
“The people who remained in the boat really went to work, and it showed up in the financial metrics,” that investor said. “It showed up in the new products.”
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Another factor in Figma’s corner in realizing its full potential as an independent firm? The AI wave, which had yet to fully materialize in 2023.
“Dylan’s vision was always to bridge the gap between imagination and reality, and AI only further accelerates that,” a second investor told BI, nodding to Figma Make — a tool allowing users to make prototypes and web apps through conversational prompts.
That investor also said Figma has unique potential as a stand-alone company, given that it works with 95% of Fortune 500 companies.
“Staying founder-led has been a real advantage,” that investor said.
Though the price tag from the Adobe deal was massive, “the exciting and desired outcome always was for it to be a public company,” a third investor said of the deal’s collapse.
During talks with Adobe, Figma entered something of a limbo period, the third investor said, affecting the kinds of hires it made who would go on to become Adobe employees and the kinds of products it developed, so as not to step on its acquirer’s toes.
Figma’s proposed IPO is one of the most hotly anticipated following a pullback within the tech IPO market in recent years, though companies like Chime, Circle, CoreWeave, and ServiceTitan have recently undergone successful offerings.
