Figma's 50x ARR Multiple and What It Means for Startup Fundraising

Figma's 50x ARR Multiple and What It Means for Startup Fundraising(tomtunguz.com)

40 points by jsm386 3 years ago | 11 comments

Adobe did not buy Figma at a 50x multiple because it thinks Figma is worth that much. It bought the company at 50x because it was a number Figma's board couldn't say no to, and removes their stiffest competition in a quarter century in the process.

tough 3 years ago | |

Maybe they should have stayed put and let them grow further? What's stopping now a Figma-like, possibly COSS app to emerge? Penpot might not be it, but something new?

jmathai 3 years ago | | |

Adobe's market cap is $150bln. At some point, if Figma continued to grow then they might not have been able to make an attractive offer.

That's a problem they felt was worth $20bln to avoid.

sieabahlpark 3 years ago | | |

Nothing but the cost, marketing, and effort to rebuild yet another design app.

"Why would I use that when I can get figma, XD, or zeplin"

petra 3 years ago | | |

Collaboration software have network effects.

cyanydeez 3 years ago |

Means nothing unless your startup will eat adobes lunch.

SilverBirch 3 years ago |

It seems strange to me - if the only possible way of valuing Figma at it's sale price is to assume that Adobe is doing something massively anti-competitive then surely a regulator can't stand for that right?

joshu 3 years ago |

factor in lost revenue due to market cannibalization for adobe? might make more sense

random314 3 years ago |

The regulators should be blocking such acquisitions

Kon-Peki 3 years ago | |

Sure seems like they will, but it will probably take a month or more to find out if they will try.

In the meantime, Adobe gets to see the inside of Figma, poke around the code, etc? I wonder if that is the plan: Suck up as much information as possible before the regulators shut it down. Sorry, it's not our fault we can't give you $50 billion and have you join the team...

boeingUH60 3 years ago | | |

They agreed to pay a $1 billion termination fee if the deal goes south.

https://thetechee.com/deal-adobe-to-buy-online-design-startu...