Paying 50x ARR is cool once more
Bloomberg reported this morning that Adobe was getting close to buying Figma, a former startup and private-market unicorn within the design house, for round $20 billion. The Photoshop-maker then confirmed the cope with a launch and a brief investor presentation. TechCrunch’s coverage of the announcement is here.
Shares of Adobe have been off greater than 15% following the information.
The transaction is very large in greenback phrases, making it price our whereas to unpack. Under we’ve collected data on the scale of Figma in income phrases, thought-about its money circulate place and chatted by way of what the transaction might imply for different corporations of comparable dimension which might be ready out the present IPO drought.
Earlier than we do all that actual work, nevertheless, can I simply say that I’m oddly bummed by the deal?
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Figma is considerably of a basic startup and enterprise capital success story. Following a seed spherical again in 2013, Figma attracted common exterior investments by way of a mid-2021 Sequence E price $200 million that valued the software program upstart at round $10 billion, per Crunchbase data. At one level, promoting for a mere double of a closing enterprise spherical can be a smaller exit value than what buyers would have hoped after they executed the funding. However! A doubling of a 2021-era valuation in 2022 is a large win, given how far the valuation bands for know-how corporations have shifted within the final yr.
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