A shockwave has been sent through a sector that has been among the hardest affected in the digital sell-off that started late last year with Adobe's agreement to purchase design software startup Figma for almost $20 billion.

Figma, situated in San Francisco and formed in 2012, enables online collaboration between software engineers and designers to create everything from presentation slides to mobile app user interfaces.

It is a part of a wave of fresh browser-based design tools, along with Australian upstart Canva, that have made the creative process accessible to millions of non-designers, growing the market and posing a possible challenge to Adobe, the established leader in design software.


Despite the recent collapse in software stocks, the purchase price, which will be split equally between cash and stock, is double what Figma was valued at in its most recent private funding round last year and ten times its valuation in 2019. The company is valued at 50 times its recurring yearly sales, which, according to Adobe, will reach $400 million in 2022.


The significant premium played a part in the early Thursday morning decline in the price of Adobe's shares, which was brought on by the company's cautious earnings outlook. The negative prediction reduced its worth by 16.8%, or $29 billion.


The deal, which surpassed Facebook's $19 billion purchase of WhatsApp in 2014, was the most costly ever made by a US private firm at the time of signing. By Thursday night, the value of the Figma purchase had dropped to $18.3 billion due to the precipitous collapse in Adobe's stock price.


And the co-founder of Figma Dylan Field has also addressed by saying we are delighted to invent the revolutionary product in designing field called figma and people have been enjoying designing with it...so keeping in mind that we are going to integrate figma with Adobe.