Google will acquire Figma
An acquisition prediction that will impact designers and startups
Who will acquire Figma? I’m betting on Google. Adobe’s planned $20 B acquisition of Figma in 2022, a price 50 X Figma’s expected revenue for that year, was one of the most expensive proposed tech acquisitions ever and was met with significant investor skepticism, leading to a 15% drop in Adobe’s stock price.
This reaction was unusual compared to other major tech M&A deals during the same period. Investor confidence fell due to the high acquisition cost, Figma’s lower-than-anticipated earnings report, and a shift in investor focus from growth to profitability amid market volatility and high inflation.
Following the termination of the acquisition deal with Adobe due to regulatory concerns, Figma has not announced any immediate plans to go public. The company may still be determining its next steps, which could include pursuing an IPO or finding a new acquisition partner.
Based on Config 2024, it’s clear Figma hopes to expand its target audience to developers. I suspect that Figma already has a new acquisition partner in mind, and it may be a company very popular with developers. This would avoid anti-trust concerns.
I suspect Google might be the top contender as of July 2024 due to an odd moment at Config 2024. The PM of Figma’s new product, Figma Slides, repeatedly pointed out that CEO Dylan Field had overridden her decision about the product name. This is an unusual product marketing tactic, as it deviates from the naming conventions of the rest of the product suite, Figma and FigJam, and sounds VERY similar to Google Slides. Given that designing presentations is the second most popular task for Designers after designing interfaces, this could be a big win for both companies.
Google Slides has very limited design capabilities, and integrating the technology of Google Slides with Figma Slides could drastically widen Google Slides’ user base among designers. We will likely see a Google Slides Figma integration rolled out before the end of the year as both companies test the waters of their partnership.
Both Google Slides and Figma Slides support cross-functional collaboration, making a natural cross-product mash-up fit. A well-received acquisition of Figma by Google could potentially lead to a 10% increase in stock price initially, assuming positive investor sentiment and market conditions.
That’s not a huge jump, so my best guess is that Google’s primary motive for the acquisition is more concerning. Google likely aims to train its AI models on designers’ data. They have several AI models and tools, including AutoML Vision, TensorFlow, DeepDream, BigGAN, Magenta, and StyleGAN. This could explain Figma’s poorly received rollout of its AI opt-in feature, which is left on by default for individual users, and the lack of transparency around how they intend to utilize AI in their long-term product roadmap. 2.8 M of Figma’s 4 M users are designers whose jobs may be automated by 2026, with layoffs equivalent to the population of a country. Imagine the competitive edge Google may gain by absorbing all the product ideas from smaller competitors before they even launch.
