Adobe’s $20 billion deal for Figma is spooking investors and raising questions among analysts about the health of its business
the low-key maker of digital tools to create PDFs and edit photos, pleased investors by reinventing itself as a subscription-software business. Its latest effort to keep pace with the times isn’t landing so well., agreeing to buy Figma, a little-known software startup that specializes in helping digital creators collaborate. The $20 billion deal price spooked investors and raised questions among analysts about the health of Adobe’s business.
Adobe products such as Photoshop and Illustrator are almost essential tools for people who design marketing materials and magazines. But some users have complained on social media and elsewhere that the products are difficult to use and lack the collaboration features available with Figma and elsewhere.
Figma’s appeal for users like Mr. Vinci helps explain why Adobe was willing to pay 50 times the smaller company’s expected annual recurring revenue for 2022, and twice the valuation it received in a funding round last year. Adobe Chief Executive Shantanu Narayen has defended the acquisition as “transformative,” adding on an analysts call that large deals are often viewed with skepticism.“Stronger companies are actually the companies that should be making the moves to position themselves to serve customers for decades,” Mr. Narayen said in an interview. “We really believe that the opportunity for us is to usher in this new world of collaborative creativity.
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