Hunter Walk's counterargument reframes the multiple: the relevant number isn't margin but trajectory — Figma's ARR was still doubling, and that growth was itself exerting pricing pressure on Adobe's core creative business. The related coverage supplies the damning internal comparison: Adobe's own competing product, XD, managed just $15M in annual revenue after seven years.
First-order effects
Adobe removes the fastest-growing threat to its creative-tool pricing power by owning it outright, paying for doubled-and-doubling ARR rather than current profits.
Figma CEO Dylan Field stays on to run Figma inside Adobe, while ADBE shareholders absorb the cost — the stock's double-digit drop prices in their skepticism about the 50x multiple.
Second-order effects
XD's $15M-after-seven-years result is now the cautionary benchmark: Adobe has demonstrated it cannot out-build a cloud-native rival organically, so future competitive responses default to acquisition rather than internal development.
Design teams choosing between Figma and cheaper or free alternatives lose the independent option that was forcing Adobe's hand on pricing, shifting negotiating leverage back toward the incumbent.
Third-order effects
If the pattern holds, premium multiples paid for growth rather than margin become the standard defense for incumbents facing cloud-native unbundlers — with the risk that regulators scrutinize exactly this 'buy the disruptor' playbook.
The deal anchors a valuation logic where a doubling ARR curve justifies prices that look indefensible on a spreadsheet, encouraging more startups to scale revenue aggressively as an acquisition strategy rather than a path to standalone profitability.
The trend: Legacy software incumbents are increasingly neutralizing cloud-native unbundlers through premium-priced acquisitions when their own competing products fail to keep pace.
Why Figma is Worth $20B And Other Observations From The Adobe Acquisition Hint: The Answer Doesn't Involve a Spreadsheet https://hunterwalk.medium.com/ ...
“What you should realize is that Adobe was only able to make this acquisition because they escaped the old business model and were rewarded with a market cap that hit $200b+ over the last 12-24 months.” 🎯 Shantanu Narayen has been one of the best turnaround CEOs https://twitter.c…
Great stuff from @hunterwalk on Adobe/Figma. At least this one will eventually be additive unlike, say, WhatsApp. That was 99% about taking a competitor out of the market. Whether FB ever monetizes it is open question. It's been more than 8 yrs https://hunterwalk.medium.com/ ...
THREAD: This morning we're announcing that @Figma has entered into an agreement to be acquired by @Adobe ! More information here: https://figma.com/... (1/9)
I'm not surprised that Adobe is acquiring Figma for $20B, nor that Wall Street doesn't understand it and $ADBE stock is down more than $20B today. It's a smart move for Adobe because it's nearly impossible to make legacy software applications multi-user collaborative. Thread: 🧵
If Figma keeps doubling in ARR for the next 3 years, they'll be doing $3.2B in rev That's a 6x multiple which ADBE is paying now to keep out of hands of MSFT $3.2B is roughly 13% of ADBE's projecte '25 revs of $25B 13% of ADBE's pre-deal market cap is roughly $20B
Congratulations @figma and @zoink on the largest acquisition of a private tech company ever. @kleinerperkins couldn't be more proud of the team + look forward to what you all accomplish as part of the @Adobe family.
“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.” Respect for the conviction 👏🏽👏🏽 https://twitter.com/...
Sequoia led Figma's Series C round in 2019, valuing the company at $440 million. It invested a total of $97 million for a 6% stake in the company worth $1.2 billion at the time of the Adobe deal. https://www.theinformation.com/ ...