Figma’s Record-Breaking Sale to Adobe Delivers Billions to Top VCs Sarah McBride and Katie Roof Fri, September 16, 2022 at 8:38 AM·3 min read Figma’s Record-Breaking Sale to Adobe Delivers Billions to Top VCs In this article: ADBE -3.12% (Bloomberg) -- Danny Rimer first invested in Figma in 2012, shortly after the company was established and began developing software tools for designers. Rimer, a partner at the venture capital firm Index Ventures, invited Figma’s co-founder and chief executive officer, Dylan Field, to dinner and ordered a bottle of wine to celebrate the deal. It was then that the young entrepreneur hesitated. “Danny, I’m 19,” Field said. Rimer went ahead, he recalled, and ordered the Pinot anyway. Most Read from Bloomberg Jeff Bezos Loses Spot as World’s Second Richest Person to Gautam Adani Patagonia Billionaire Who Gave Up Company Skirts $700 Million Tax Hit Germany Tightens Control Over Industry With Russian Oil Grab Putin Acknowledges Xi’s ‘Concerns’ on Ukraine, Showing Tension Adobe Near Deal for Online Design Startup Figma, Sources Say On Thursday, Adobe Inc. said it will buy Figma in a deal valued at about $20 billion — the largest exit of a privately held, VC-backed startup in at least 20 years, according to PitchBook data. Field, 30, is now of legal drinking age in the US, and both he and Rimer stand to make a lot of money from the sale. Index is the biggest outside shareholder in Figma. It holds more than 12%, said a person familiar with the business who asked not to be identified because the information is private. Rimer and Figma declined to comment on the size of Index’s stake. The firm’s first check and its subsequent investments are now worth about $2.6 billion. Field had made an early impression on Rimer as an intern at Flipboard, which makes a news aggregation app. Rimer was on the board and watched a young Field give a polished presentation. Field briefly attended college, but dropped out to join a fellowship program funded by Peter Thiel and soon went to work on Figma. At the outset, Field told Rimer he would spend up to three years developing Figma’s design tools before releasing them to the public. “It wasn’t an incremental, small thing,” Rimer said. Figma amassed a roster of some of the top VC firms as its backers. Greylock Partners got in as the lead investor of a $14 million funding round in 2015, and Kleiner Perkins led a $25 million round in 2018; its stake is nearly 11%, said people familiar with the business. The early backers each ended up with at least $2 billion, said another person, who also asked not to be identified discussing private details. Sequoia Capital invested in 2019, valuing Figma at $440 million. (The Sequoia partner who did the deal, Andrew Reed, tweeted a photo of Field signing the original paperwork with some of the terms clearly legible.) Sequoia put in $97 million in total and snatched a 6% stake in Figma, said a person familiar with the details. Sequoia’s stake is now worth $1.3 billion, and the single investment had a return exceeding the total value of the US growth fund it came from, the person said. Another storied firm, Andreessen Horowitz, invested in Figma in 2020 and its stake is now worth about $500 million, according to a person familiar with the situation. As for Rimer, he’s been thinking a lot about the dinner in 2012. To mark Thursday’s news, Rimer said he plans to send Field a case of wine. (Corrects detail about VC-backed exits in the second paragraph. An earlier version corrected the size of Sequoia's stake.)
What does Figma do? "Figma connects everyone in the design process so teams can deliver better products, faster." Wow!! $20 billion!!! You would think this is something that management or a team leader would do? HP made a few catastophic deals 20 yrs ago or so. Can anyone name any other deals that were worse? The thing here is that it is bad to start with.
Doesn't it remind you of Time Warner and AOL merger some 20 years ago? Probably this century's worst financial fiasco. WTF were they thinking?
Says Adobe who has some serious extra cash to burn. Is this Adobe's poison pill? Is Adobe getting a hostile take-over? Either that or this is a non-arm's length deal...
Market cap of ADBE is down $33.7 billion in the last 2 days. It doesn't sound like the shareholders like it much. It is supposed to start making money in 2025, so for 2.5 years this is a money loser. According to what I read Figma (and Canva) were eating Adobe's lunch for these collaborations during the pandemic. That is the reason for the buy. It looks a little like the Instagram buy by Facebook when people were leaving Facebook for Instagram (and when Zuckerberg tried to buy Snap for $20 billion).
Yeah if I were a shareholder of Adobe, I would be mad too. That company is way overpriced. And it doesn't even provide much synergy with Adobe. I dunno what Adobe sees in that company. This is why I say it's either a poison pill potentially for something or it's a non-arm's length deal.
Troubled, fading tech firms often make terrible deals because the CEOs just want to be seen as doing something. It's great for Figma people though.