The deal, which would have been double Figma's $10 billion valuation from a 2021 funding round, has raised concerns about the impact of regulatory scrutiny on the startup ecosystem. Regulators were worried that Adobe's acquisition of Figma would eliminate a major competitor and harm competition in the industry. Some investors and analysts believe that this could limit exit opportunities for venture-backed companies.
Key takeaways:
- Adobe has cancelled its planned $20 billion acquisition of design software startup Figma due to antitrust concerns from regulators in the U.K. and European Union.
- Adobe will pay a $1 billion deal termination fee to Figma, stating there was no clear path to receive necessary regulatory approvals.
- Figma, valued at $10 billion in 2021, offers cloud-based collaboration software for designers and competes directly with Adobe.
- Regulators' scrutiny of large tech companies acquiring startups could limit exit opportunities for venture-backed companies, potentially affecting the startup ecosystem.