An Ivy League graduate made history in Silicon Valley after Adobe offered to buy its graphic design software company for $20 billion.
Adobe on Thursday offered to buy Figma in a cash-and-stock deal that would be the largest buyout of a software startup ever, despite the sharp drop in tech sector valuations this year.
Dylan Field, 30, who co-founded Figma in 2012, will easily become a billionaire if the deal closes as expected, though his exact stake in the company isn’t clear, according to the Wall Street Journal.
He launched Figma after dropping out of Brown University under a $100,000 scholarship funded by billionaire Peter Thiel, who requires recipients to drop out of school and pursue entrepreneurship if they get the grants.
Field is a shy type who prefers nights with board games and wine, friends say. His company provides popular tools that graphic designers use to collaborate on projects online.
Dylan Field, 30, who co-founded Figma in 2012, will become a billionaire if Adobe’s offer to buy the startup closes next year, as expected.
Adobe on Thursday offered to buy Figma in a $20 billion cash-and-stock deal, which would be the largest buyout of a software startup ever.
Figma’s web-based collaboration platform has gained loyal fans and is very popular with employees of major technology companies, including Zoom, Airbnb and Coinbase.
Based in San Jose, California, Adobe is a software giant that sells tools for creating, publishing, promoting content and managing documents.
Wall Street reacted skeptically to the high price of the deal, which sent Adobe shares down 3 percent Friday and wiped nearly $5 billion of the company’s valuation.
Still, Field told the Journal he’s not worried about investor opposition.
“If this deal failed tomorrow, I’d be fine,” he said.
Adobe CEO Shantanu Narayen praised Figma’s company as “the future of work” and said there were “huge opportunities” to combine it with his company’s offerings, such as the Acrobat document reader and the online whiteboard Figjam.
The $20 billion exit marked a major win for Figma’s venture capital backers, including Index Ventures, Greylock Partners and Kleiner Perkins.
Field is seen as a teenager at the Foo Camp hacker conference in 2008. He dropped out of Brown University and founded Figma after accepting a $100,000 fellowship
Billionaire Peter Theil founded the fellowship — but requires anyone who accepts it to drop out of school and pursue entrepreneurship instead
Figma’s valuation has skyrocketed at speeds rarely seen even in the Silicon Valley world, and Kleiner Perkins will recoup about 100x its investment in 2018 when the deal closes.
Josh Coyne, partner at Kleiner Perkins, praised the deal, saying, “This partnership gives Figma users access to Adobe’s photography, illustration and video technology, all in one place.”
“And Figma can offer its deep expertise in browser building in return,” he added.
Each company will operate independently until the transaction closes. At that time, Field, who will continue to lead the Figma team, will report to David Wadhwani, president of Adobe’s Digital Media business.
The deal is expected to close next year. It still needs approval from Figma’s shareholders and regulatory approval.
Both companies will have to pay a $1 billion termination fee if they scrap the deal.
Field is a shy type who prefers nights with board games and wine, friends say:
Elena Nadolinski, founder and CEO of Iron Fish, and Dylan Field, CEO and co-founder of Figma, attend the annual Allen and Co. Sun Valley Media Conference at in July
David Wagner, portfolio manager and equity analyst at Aptus Capital Advisors, which owns a 1.5 percent stake in Adobe, questioned the wisdom of the deal.
He said Figma’s annual recurring revenue (ARR) was $400 million, a fraction of Adobe’s $14 billion, making it unreasonable for Adobe to pay the equivalent of 11 percent of its market value for 2.8 percent more. ARR.
“We are disappointed with the price paid for the company (Figma),” Wagner said.
Adobe said it expected the deal to add to its revenues three years after completion. It added that Figma’s total addressable market would reach $16.5 billion by 2025 for design, whiteboarding and collaboration.
One of the most acquisitive companies in Silicon Valley, Adobe has acquired numerous companies over the years as it sought to defend its market share against competitors.
Prior to Figma, the largest acquisition was that of software maker Marketo for $4.75 billion in 2018.
It has also bought other companies over the past 24 months to sharpen its focus on collaboration tools, including those from video collaboration software Frame.io, social media marketing startup ContentCal and collaboration tools maker Workfront.
Meanwhile, Adobe’s revenue forecast of $4.52 billion for the fourth quarter fell below the $4.58 billion estimated by analysts, according to data from Refinitiv.
The company’s third-quarter profit fell nearly 6 percent, following the blow from a stronger US dollar and higher costs.