Figma investors say going public is a better outcome than its abandoned Adobe deal

Figma, the design software innovator, is gearing up for a highly anticipated public offering, and investors now view the abandoned $20 billion acquisition by Adobe as a stroke of luck. In 2023, Adobe's plans to acquire Figma were thwarted due to antitrust concerns in the UK and EU, sparking discontent among members of the design community who feared potential price increases and stagnation in innovation. With the Adobe deal in the rearview mirror, Figma submitted its IPO filing on July 1. In discussions with Business Insider, three investors, who requested anonymity during this quiet period, expressed that the failed acquisition could have revitalized Figma's innovation trajectory. "I always believed that the company had a chance to build a much bigger business than the Adobe deal," one investor remarked. The cancellation of the agreement, coupled with a $1 billion breakup fee, was described as a "crucible moment" for the company. In the wake of the deal's collapse, Figma seized the opportunity to reset its valuation and launched an array of new products, including four unveiled at its annual Config conference in May, effectively doubling its offerings. "The people who remained in the boat really went to work, and it showed up in the financial metrics and the new products," the investor added. Another significant advantage for Figma lies in the burgeoning realm of artificial intelligence. A second investor highlighted that Figma's tools, like Figma Make—which enables users to create prototypes and web applications using conversational prompts—are positioned to leverage this technology. With a client list that includes 95% of Fortune 500 companies, Figma's potential as an independent entity is substantial. "Staying founder-led has been a real advantage," the investor noted. Despite the hefty price tag associated with the Adobe acquisition, a third investor emphasized that the ultimate goal has always been for Figma to thrive as a public company. During the acquisition discussions, the company faced a stagnant period that hindered its hiring processes and product development to avoid conflicting with Adobe's interests. Figma's upcoming IPO is one of the most eagerly awaited in light of a recent slowdown in the tech IPO market, although companies like Chime, Circle, CoreWeave, and ServiceTitan have recently made successful market entries.