So we can only learn so much about Figma.  Even though it’s being acquired for $20 Billion (!) by Adobe — the largest private acquisition in SaaS ever, and maybe startups ever — it doesn’t really have to disclose any information itself, and Adobe only has to disclose limited information for now (it will share more later).

But we can learn some good stuff from what’s been disclosed.  And what we can learn is pretty darn interesting.  That Figma is growing so quickly, in such an important space … that maybe the deal wasn’t so crazy expensive after all!

5 Interesting Learnings:

#1. Ended 2021 at $200m ARR, on plan to hit $400m ARR in fiscal 2022.  Figma is doubling (!) at $300m+ ARR.  This is just epic.  Figma is doubling at $200m-$300m ARR.

#2.  150% NRR.  Not a total shocker, but very impressive, and key to Figma’s insane growth after $200m ARR.

#3.  Positive cash-flow.  Most folks do get here by $300m+ ARR, but still impressive that Figma isn’t burning cash.  A strong example of the success of a PLG-motion.

#4.  850 employees, so perhaps $350,000 in revenue per employee.  I’m guessing a bit here on actual ARR at the moment, but in any event, $350,000 in revenue per employee is pretty efficient.  Most public SaaS companies aim to get above $250,000.  This is a good business model!  Revenue per employee is the ultimate summary of how efficient a business model is.  Figma’s is pretty efficient, which makes it a good fit inside of Adobe, which is pretty efficient itself.

#5.  2,000 plug-ins.  The ecosystem that has developed around Figma is indeed a moat.

And a few other interesting learnings:

#6.  As many Developers use Figma as Designers.  Assuming this pie chart is accurate (I assume it is, since Adobe published it this way), just about as many developers use Figma as designers.   Obviously, both are key users and stakeholders in design, but it’s interesting to me they both seem to make up about 33% of the user base:

#7.  Paying just about 1x all of Adobe’s annual revenues to buy Figma.  More just of interest, but Adobe is now passing a $17B run-rate.  That means it’s basically paying as much as it takes in, in 1 year, to buy Figma.

#8.  Adobe’s Creative Division Revenue Growth Has Slowed.  It needs this deal (or something else similar at scale).  While its smaller Document Cloud division is growing 22% a year (Go Adobe Sign!!), after an incredible run, Creative Cloud has matured and is now only growing 10%-11% a year.  While some of that is due to adverse current effects, it’s still slower growth.  And that growth rate probably is not enough given Adobe’s market cap and multiple, so it’s time for a big bet.  That big bet is Figma, which, if it hits $600m+ in ARR next year, can make a material contribution not just to the product suite but to revenue growth.  Figma, while hardly cheap at $20B :), could be just the revenue boost Creative Cloud needs for late 2023 and 2024.

Wow.  $20B sounds like a lot, and it is a lot.  And public comps have fallen 50%+ this year, making the deal sound even more expensive.

But maybe it isn’t that expensive, actually.  If Figma grows to $1B in ARR by, say, 2026, it will be the future engine of growth for $133B+ Adobe.  The core Creative engine is mature now, and Figma is stealing from it.

That’s worth $20 Billion right there.

I’d take that bet.  Go Team Adobe!


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