An Ivy League college dropout has made Silicon Valley history after Adobe offered to buy his graphic design software company for $20 billion.
Adobe on Thursday offered to buy Figma in a cash-and-stock deal that would be the biggest buyout of a software startup on record, despite the sharp drop-off 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 firm is not clear, according to the Wall Street Journal.
He launched Figma after dropping out of Brown University under a $100,000 fellowship financed by billionaire Peter Thiel, who requires recipients to leave school and pursue entrepreneurship if they are awarded the grants.
Field is a bashful type who favors nights in with board games and wine, friends say. His company offers popular tools that graphic designers use to collaborate on projects online.
Dylan Field, 30, who co-founded Figma in 2012, is set to 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 that would be the biggest buyout of a software startup on record
Figma’s web-based collaborative platform has gained loyal fans, and is widely popular with employees at major tech firms including Zoom, Airbnb and Coinbase.
Adobe, based in San Jose, California, is a software titan that sells tools for creating, publishing and promoting content, and managing documents.
Wall Street reacted to the rich price of the deal with skepticism, sending Adobe stock down 3 percent on Friday and wiping nearly $5 billion from the company’s valuation.
Still, Field told the Journal that he has no anxiety about the investor opposition.
‘If this deal fell apart tomorrow, I’d feel just fine,’ he said.
Adobe CEO Shantanu Narayen hailed Figma’s business as ‘the future of work’ and said there were ‘tremendous opportunities’ in combining it with his company’s offerings, such as document reader Acrobat and 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 leave school and pursue entrepreneurship instead
Figma’s valuation has skyrocketed at speeds that are rarely seen even in the world of Silicon Valley, and Kleiner Perkins stands to make return of about 100x its 2018 investment when the deal closes.
Josh Coyne, partner at Kleiner Perkins, praised the deal, saying: ‘This partnership will give Figma users access to Adobe’s photography, illustration, and video technology, all in one place.’
‘And, Figma in return can offer its deep expertise in building in the browser,’ he added.
Each company will run 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.
Either company will have to pay a termination fee of $1 billion if they scrap the deal.
Field is a bashful type who favors nights in with board games and wine, friends say
Elena Nadolinski, Founder and CEO at Iron Fish, and Dylan Field, CEO and Co-founder of Figma, attend the annual Allen and Co. Sun Valley Media Conference 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 tiny fraction of Adobe’s $14 billion, making it an unreasonable for Adobe to pay the equivalent of 11 percent of its market value for 2.8 percent more ARR.
‘We’re disappointed with the price paid for the company (Figma),’ said Wagner.
Adobe said it expected the deal to be accretive to its earnings three years after its completion. It added that Figma’s total addressable market would reach $16.5 billion by 2025 across design, whiteboarding and collaboration.
Adobe is one of the most acquisitive companies in the Silicon Valley and has bought numerous businesses over the years, as it has looked to defend market share against competitors.
Prior to Figma, its 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 of video collaboration software Frame.io, social media marketing startup ContentCal and collaboration tool maker Workfront.
Meanwhile, Adobe’s fourth-quarter revenue forecast of $4.52 billion came in below the $4.58 billion estimated by analysts, according to Refinitiv data.
The company’s third-quarter profit fell nearly 6 percent, reflecting the hit from a stronger U.S. dollar and higher costs.