Before the announcement his intention to buy Figma on Thursday for $20 billion, Adobe’s largest deal was the $4.75 billion acquisition of Marketo in 2018.

Why go so far out of the price comfort zone and pay twice as much as Figma’s most recent private appraisal? The easy answer is that it’s about taking a potential rival off the market. Yes, Adobe XD is a similar product, but this deal could be more than just playing defense.

It may be that — like IBM bought Red Hat for $34 billion in 2018 or Salesforce acquired Slack for nearly $28 billion in 2020 — Adobe’s executive team saw a company that could fundamentally change their organization.

For IBM, the acquisition of Red Hat was about the hybrid cloud. For Salesforce and Slack, it was the digital workplace, but both saw a shift in their markets coming and made a huge offer for a major company to stay ahead of it. Both also held those pieces independently with the existing CEO in place (more on this later).

Perhaps Adobe saw the Figma deal as its organization-changing moment as it saw the creative market undergo a significant shift from one focused on creating assets with tools like Photoshop and Illustrator to one that focused heavily on the creators themselves and the collaborative nature of the design process .

The first is where Adobe built most of its business. The latter is represented by Figma, a startup with visionary founders who wanted to change the way people thought about design in a digital context, a change so important that the old guard company was willing to spend too much money for the young upstart. and grasp the two ways of thinking together.

We spoke to people from the companies involved, Figma investors and industry analysts to get a sense of why this deal failed. The bottom line is that there were many reasons, but perhaps the best one was that Figma and Adobe think they will be better together.

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