How Figma Killed Adobe's Design Monopoly

Highlights

• Adobe agreed to acquire Figma for $20 billion in September 2022 after losing market share to Figma's browser-based collaborative design tools.

• UK and European antitrust regulators investigated the acquisition, concluding that the merger would eliminate meaningful competition in the creative software market.

• Adobe paid Figma a $1 billion termination fee on December 18, 2023, after regulatory pressure caused both companies to terminate the merger.

• Figma reached $749 million in revenue for 2024, representing a 48% increase compared to the previous year.

• Figma filed for an IPO in July 2025 at $33 a share, achieving a valuation of $19.3 billion on its first day of public trading.

Timeline

1. 00:00 - 03:09

   Adobe Loses Market Share to Figma

   Adobe dominated the creative software industry for decades, forcing professional designers to pay recurring subscription fees. Figma disrupted this model by introducing browser-based collaboration and file sharing without email attachments or zip files. By the time Adobe attempted to acquire Figma for $20 billion, major technology corporations had already migrated their workflows to the platform.

   • Adobe held a long-standing monopoly over design software with monthly subscription products like Photoshop, InDesign, and Illustrator.
   • Figma entered the market in 2012 with a browser-based, collaborative platform that required no software installation and offered a functional free version.
   • Major enterprises including Google, Microsoft, and Netflix transitioned their design workflows to Figma.
   • Adobe announced a $20 billion cash and stock acquisition of Figma in September 2022 to counter its fading market dominance.
2. 01:43 - 03:10

   Regulatory Intervention and Deal Collapse

   Antitrust regulators scrutinized the transaction because it threatened to consolidate creative and design software under a single corporate entity. Although Adobe defended the merger by claiming a lack of direct competition, regulatory agencies demanded the divestment of Figma's core design product. This ultimatum invalidated the purpose of the acquisition, triggering a $1 billion contractually mandated termination penalty.

   • The UK Competition and Markets Authority and the European Commission launched antitrust investigations into the merger.
   • Regulators determined that combining Adobe and Figma would eliminate meaningful competition in creative software.
   • Adobe argued during the legal defense that the two companies did not meaningfully compete with one another.
   • Both companies mutually terminated the acquisition on December 18, 2023, resulting in Adobe paying a $1 billion regulatory termination fee.
3. 03:44 - 05:28

   Figma Independence and Public Offering

   Following the canceled merger, Figma accelerated its business growth and expanded revenue to $749 million in 2024. Rather than accepting acquisition, the company pursued a public offering in July 2025 valued at $19.3 billion. Public market demand drove a 250% surge on the first day of trading, successfully cementing Figma's independent market position.

   • Figma recorded $749 million in revenue during 2024, marking a 48% year-over-year increase.
   • The company filed for an initial public offering in July 2025.
   • Figma priced its IPO shares at $33, resulting in an initial valuation of $19.3 billion.
   • Stock prices surged 250% on the first day of trading, pushing Figma's market valuation past Adobe's original acquisition bid.