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Comment by andsoitis | Hacker News Reader

Why did Figma want to sell itself to Adobe in the first place?

Even though their revenue is only about $400MM, As far as I know, they make a very healthy profit (operating margin of ~90%), and they’ve also been expanding through organic and acquisition means (e.g. they bought Diagram).

Is it because they see the ability to grow the company’s products even more given the Adobe footprint?

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I think they saw 20 billion reasons to sell to Adobe. Their last valuation was $10billion in 2021 so a 2x on that a year later would be hard for anyone to pass up. They can pretend they went with Adobe for aspirational aims to make the product better, but at the end of the day it was about the very juicy multiple Adobe was offering.

Assuming your numbers are correct, they sold for 50x ARR, which is a very very good price. I bet that’s why. It’s hard to do better than that.

The $20B price was a massive overpay is the most likely reason.

This exactly. When someone offers you $20B, it's hard to turn it down. In Adobe's case, $20B is a bargain price to stifle a competitor.

Even if Figma founders didn't want to sell, all the VCs and other investors would force the hand.

What makes you think they have an operating margin of 90%? The blog post says in the last 15 months alone they've hired 500 additional employees ("figmates"), there's no way their margin is anywhere close to what you cite.

"Figmates" has a dotcom air to it.

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