Figma and Adobe abandon proposed merger

Overall Reaction

• Many designers and developers are relieved Adobe won’t own Figma, expecting this avoids “enshittification” and loss of competition.
• Several commenters explicitly say they don’t even use Figma but are happy Adobe was blocked, reflecting strong distrust of Adobe.
• Sympathy is expressed for Figma employees who were expecting life‑changing payouts; some predict morale and retention issues.

Breakup Fee and Financials

• Adobe owes Figma a $1B cash termination fee, confirmed via Adobe’s SEC filing; payment due within three business days.
• People debate how “hard” it is to move $1B (wires vs ACH, money markets, bridge loans), but consensus is that large banks handle this routinely.
• Some suggest Figma could use the $1B to reward employees or early investors and strengthen its balance sheet without dilution.
• Later reporting cited in the thread says Figma expects >$600M ARR in 2023, ~40% growth, already cash‑generating, making it one of the stronger late‑stage private SaaS companies.

Regulators and Antitrust

• Many frame this as regulators finally doing their job after years of tech consolidation; see it as a win for competition and consumers.
• Others worry “bureaucrats” blocking exits will chill startup formation and VC funding, especially when a dominant player tries to buy its main competitor.
• Debate over jurisdiction: UK and EU agencies are portrayed as more aggressive; US DOJ and FTC signaled concern early but hadn’t yet blocked the deal formally.
• Some argue blocking a dominant incumbent from acquiring its closest rival is exactly what existing antitrust doctrine is for; others call this speculative, overreaching, and harmful to M&A.

Impact on Startups, VC, and M&A

• One camp: exits via acquisition are “the entire purpose” of VC‑backed startups; constraining large‑tech acquisitions reduces incentives to found and fund ambitious companies.
• Opposing camp: over‑reliance on “build to be acquired” produces fragile, enshittified products; blocking anti‑competitive deals encourages sustainable, profit‑driven businesses and more mid‑sized companies.
• Some foresee a broader chilling effect on big‑ticket M&A because 12–18 months of regulatory limbo is costly and distracting.

Adobe’s Reputation and Practices

• Adobe is widely criticized for:
  • Dark‑pattern subscription flows and punitive cancellation fees; FTC is reported to be investigating.
  • Bloated Creative Cloud stack, intrusive background processes, and difficult uninstalls.
  • History of buying competitors (e.g., Macromedia/Freehand/Fireworks) and then killing or neglecting them.
• Several commenters share personal horror stories about being trapped in annual contracts or losing value (e.g., Adobe Stock tokens) on cancellation.
• Some note that despite these practices Adobe’s subscription pivot massively increased its valuation, so it’s unlikely to change voluntarily.

Figma’s Future Path

• Common expectations:
  • Likely IPO in a couple of years, strengthened by the $1B fee and strong growth metrics.
  • Potential alternative acquirers: Microsoft is mentioned most often; Salesforce and big cloud players are also floated.
• Some warn Figma’s heavy VC backing means it may still trend toward higher prices, segmentation, and upsell regardless of independence.
• Others hope Figma remains a strong standalone competitor forcing Adobe to improve or re‑invest in a serious XD successor.

Product and Technical Discussion

• Figma is praised as a performant, multiplayer, browser‑based design tool; its real‑time collaboration and “auto‑layout” style constraints are seen as key differentiators.
• Adobe XD is viewed as having failed to catch up; it was reportedly put into maintenance mode after the merger announcement.
• There’s debate over AI: some think Adobe’s Firefly and broader gen‑AI capabilities will matter more long‑term than owning Figma; others argue AI still needs strong human‑centric editors like Figma and that Figma’s design data is itself a strategic asset.