Paying 50 x ARR is cool again
Bloomberg reported this morning that was Adobe close to buying Figma, a former startup and unicorn in the private market in the design space, for about $20 billion. The Photoshop maker then confirmed the deal with a release and a short investor presentation. businesskinda.com’s coverage of the announcement is here.
Shares of Adobe were down more than 15% after the news.
The transaction is huge in dollars, making it worth unwrapping. Below, we’ve gathered information about Figma’s size in terms of revenue, considered its cash flow position, and discussed what the transaction could mean for other similarly sized companies awaiting the current IPO drought.
Before we do all that real work, though, can I say I’m oddly disappointed with the deal?
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Figma is a bit of a classic success story for startups and venture capital. After launching in 2013, Figma regularly attracted outside investment through a mid-2021 Series E valued at $200 million, with the software upstart valued at approximately $10 billion, per Crunchbase data. At one point, selling for just double a last venture round would be a lower exit price than what investors had hoped when they made the investment. But! Doubling a valuation from the 2021 era into 2022 is a huge win, given how far the valuation bands for tech companies have shifted in the past year.
Janice has been with businesskinda for 5 years, writing copy for client websites, blog posts, EDMs and other mediums to engage readers and encourage action. By collaborating with clients, our SEO manager and the wider businesskinda team, Janice seeks to understand an audience before creating memorable, persuasive copy.