Adobe Inc. has agreed to purchase Software design firm Figma Inc. for around $20 billion in order to extend its capabilities for creative professionals.

The Adobe acquisition, which is half cash and half shares, verifies an earlier Bloomberg story and would be the largest buyout of a private software business ever. In the premarket trade, Adobe shares tumbled approximately 7%.

During the pandemic, demand for Figma, which lets customers collaborate on software as they built it, increased as more individuals worked remotely. In recent years, the company’s client base has extended from software designers at large corporations such as Airbnb Inc., Google, Herman Miller Inc., and Kimberly-Clark Corp. to people creating light games, maps, and project presentations.

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Adobe had been a favourite of investors for a long time. But, since the start of this year, it has been hit by the tech downturn and witnessed one third share loss of its value. It has created doubts in investors’ minds concerning Adobe’s dominance in the designing software arena, which covers around 60% of its profit-making. 

Dylan Field and Evan Wallace co-founded Figma in San Francisco around a decade ago. In its most recent investment round a year ago, the firm was valued at $10 billion. It launched browser-based software design tools that enable software designers to collaborate in real-time, avoiding the sometimes cumbersome process of saving and delivering work to collaborators via a collection of distinct apps. 

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