Figma and Adobe are abandoning our proposed merger

15 months ago, Figma and Adobe announced their intention to merge, with the goal of accelerating their capabilities for their respective communities. However, the companies have now decided to end their pending acquisition due to a lack of regulatory approval. Despite spending thousands of hours with regulators, they no longer see a path towards obtaining the necessary approvals.

Figma, a company focused on eliminating the gap between imagination and reality in the digital economy, has made significant advancements within the past 15 months. They introduced native AI features, Dev Mode, Variables, and Advanced Prototyping, opened new hubs, hosted events, acquired AI startup Diagram, and added over 500 new team members. The CEO of Figma, Dylan Field, expressed excitement for the future and gratitude towards the community for their support.

The news of the merger’s cancellation has sparked mixed reactions from users and the tech community.

A Refreshing End to Monopolistic Ambitions?

Some users, like @madeofpalk, see the termination of the merger as excellent news, advocating for more products, more companies, and more competition. @bomewish shares this sentiment, emphasizing the need for more fragmentation to prevent monopolies. They resent the idea of larger companies like Adobe buying up their competition, as it can hurt consumers in the long run. @noirscape even highlights the deceptive cancellation practices of Adobe, which are illegal in the Netherlands.

However, not everyone is convinced that Figma and Adobe’s decision to end the merger was purely noble. Some users, like @popcorncowboy and @vikramkr, believe that the companies were simply unable to find a way around the regulatory hurdles, leading to the merger’s abandonment. @andybak suggests that it is more likely a case of failure to manipulate the system rather than a spontaneous desire to do the right thing. @j4yav, though, finds it refreshing that they were not able to get away with it, indicating their opposition to monopolistic behavior.

Figma vs. Adobe XD

A discussion also arises around competition in the digital product design space. @spaceman_2020 shares that they believe Adobe is falling behind, citing the shortcomings of Photoshop’s generative AI compared to other tools. @cantSpellSober asks about Adobe XD, wondering if it is intended to compete with Figma. According to a user named @patchorang, XD does indeed directly compete with Figma. However, @the_mitsuhiko suggests that Adobe may need to revitalize XD to truly compete in the market.

Balancing Funding and Acquisitions

The topic of outlawing acquisitions by larger tech companies is brought up by @dkyc. They argue that doing so would reduce funding and incentives to start new companies, leading to a decrease in products, companies, and competition. @madeofpalk counters this by pointing out the negative impact of short product life-cycles and the lack of incentives for larger companies to improve their products if they can simply purchase competitors.

@whatisthiseven argues that it would be good to prevent vampiric companies from dumping free services for the purpose of a quick exit. However, they fail to acknowledge that companies like Figma, which charge more for their products than Adobe, are also affected by acquisition bans. @matthewowen highlights this, pointing out that Figma has been around for over a decade and operates as a real company, challenging the perception of all tech startups being affected by acquisition bans.

@kwertyoowiyop believes that there is no shortage of tech startups at the moment, suggesting that a ban on acquisitions would not have a significant impact. However, @robertlagrant argues that the bureaucrat’s decision-making process can have an influence on exits, unlike what @kwertyoowiyop suggests. They believe that the fear of blocked exits has been a deterrent for startups.

Building Sustainable Companies

The conversation turns to the motivations and sustainability of startups. @passwordoops suggests that instead of aiming for quick exits, startups should focus on building profitable, long-term successes. @Drakim adds that there are regulations in place to protect consumers and prevent industry monopolies, highlighting the harm caused by unchecked acquisition practices.

Ultimately, Figma and Adobe’s decision to abandon their proposed merger raises important discussions about competition, monopolies, and the long-term sustainability of startups. While some users see the cancellation as a positive outcome, others question the motivations behind it. As the digital product design space continues to evolve, the role of competition and innovation will be key in shaping the future of the industry.