It’s a tale as old as time. A startup creates a great product, generating lots of sales and happy customers. A corporate behemoth tries to compete with the startup by launching its own version of the product. The corporate behemoth fails miserably and decides to buy the startup with the superior product. Then everyone lives happily ever after — or not, if the behemoth ruins the product.
The latest version of this story stars Figma — a collaborative digital design platform — and Adobe. Adobe recently announced a plan to acquire Figma for $20 billion. The deal is record-breaking in multiple ways. It’s the largest price for a venture-backed company at the time of the agreement, the highest revenue multiple ever paid for a late stage software firm and one of the biggest retention packages offered to a management team.
In this episode of The Early Investing Podcast, Vin Narayanan and Allison Brickell discuss whether this was a smart move for Adobe, why it’s such strange timing and why some stock market investors aren’t happy about it.
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