KEY POINTS

  • Adobe reached a $20 billion deal Thursday to buy Figma, a design startup based in Palo Alto, California.
  • This is the largest acquisition ever of a privately held software company.
  • The deal will be financed with cash and stock
  • Adobe said the merger will "reimagine the future of creativity and productivity" in a statement.

Software giant Adobe reached a $20 billion deal on Thursday to acquire Figma, a design startup based in Palo Alto, California. Financed through cash and stock, the deal represents the largest acquisition of a privately held software company.

Adobe said the deal will "reimagine the future of creativity and productivity" in a statement Thursday.

Figma, which launched in 2012, has been a pioneer in user experience design. Adobe, meanwhile, has a vast collection of tools in illustration, photo and video editing, graphics and 3D.

"The combination of Adobe and Figma is transformational and will accelerate our vision for collaborative creativity," said Shantanu Narayen, Adobe's chairman and CEO.

Under the merger, Figma is set to remain autonomous. Figma CEO Dylan Field said he would continue in his role after the acquisition and would report to David Wadhwani, Adobe's senior vice president.

"It is an incredible opportunity and honor to help Adobe build the next generation of creative tools. And I'm really excited about what's ahead," Field posted on Twitter Thursday.

Adobe also reported its fiscal third-quarter results on Thursday.

The company said it earned $4.43 billion in revenue, representing a 13% year-over-year growth. Adobe had an estimated market value of $174 billion.

In 2021, Figma raised an estimated $330 million in venture capital funding. According to Privco, a database that tracks the financial performance of U.S. private companies, Figma had a valuation exceeding $10 billion as of June 2021.

Figma is expected to report upwards of $400 million in revenue in 2022, according to CNBC.

Adobe