Adobe executives think there’s a lot that critics of its $20 billion purchase of Figma are missing. From a report: In a meeting with Axios, Adobe general counsel Dana Rao defended the deal’s price tag and highlighted why Adobe believes it needs Figma to help shape the design-software giant’s broader future. Adobe XD just wasn’t cutting it. It was a product designed for a single user sitting at a PC in a world that wants cloud-based tools for real-time multi-user collaboration. After seven years of investment, Adobe XD was bringing in just $15 million in annual recurring revenue on a standalone basis — a minuscule fraction of Figma’s $400 million annual recurring revenue. (That, in turn, is a minuscule fraction of Adobe’s overall annual revenue of $17 billion.)
Adobe has essentially put XD on ice, assigning just 20 employees to the product in what it sees as “maintenance mode.” Figma has more than 800 people. Adobe needs a rethink for the cloud era. Its current efforts have been about bringing its existing tools to the web. The Figma deal offers help with the longer-term challenge of “reimagining the whole thing,” in Rao’s words. Adobe Express is an early homegrown attempt, but Rao said Figma will help the company fully reinvent itself for the next era of design. Rao said over time Figma customers will benefit from Adobe’s other resources, including its troves of fonts and stock imagery.