Figma’s Future at Stake: What’s Next After the Adobe Fallout?
The $20 Billion Gamble That Never Happened—And Its Aftermath
Figma’s trajectory changed dramatically when its $20 billion acquisition by Adobe fell apart in December 2023. Regulatory scrutiny from both U.S. and European authorities led to the deal’s collapse, resulting in Adobe paying Figma a $1 billion termination fee. While this ensured short-term financial stability, the failed acquisition left lingering doubts about Figma’s long-term market strategy and growth potential.
For a company that had positioned itself as a leader in collaborative design, the deal’s failure was more than just a financial event—it created uncertainty among investors and users alike. The Adobe partnership would have provided significant capital and ecosystem advantages, but now, Figma faces an independent path forward with increasing pressure to justify its valuation and sustain momentum.
UI3 Backlash: When a Design Tool Alienates Its Own Designers
Just as Figma was grappling with the aftermath of the Adobe deal, it introduced its highly anticipated UI3 update—an overhaul aimed at modernizing the interface and enhancing workflow efficiency. Instead, the update sparked widespread criticism within the design community.
Longtime users took to forums, social media, and industry discussions to express frustration over UI3’s increased complexity, unnecessary additional clicks, and a perceived shift away from Figma’s core principles of intuitive design. The backlash suggests a deeper issue: a growing disconnect between Figma’s development direction and the practical needs of its professional user base.
Enterprise clients and agencies, who rely on Figma for efficiency, have found the new UI to be disruptive rather than helpful. Some teams reported productivity declines as employees struggled to adapt to altered workflows, leading to discussions about whether Figma’s design priorities had shifted too far toward aesthetics over usability.
The Rise of Open-Source Challengers: A Serious Threat to Figma?
The dissatisfaction with UI3, coupled with unease over the failed Adobe deal, has fueled interest in open-source design tools. Platforms like Penpot, a web-based open-source design and prototyping tool, have gained significant traction.
Penpot’s user base has grown rapidly, particularly among teams seeking more customization, transparency, and control over their tools. Unlike Figma, Penpot offers open-source flexibility, allowing teams to modify and extend functionality without being locked into corporate-driven updates. This trend reflects a broader shift in the software ecosystem, where users increasingly favor decentralized and community-driven solutions over proprietary platforms.
Investor Confidence Wavers: Is Figma Still a Safe Bet?
For investors, Figma remains a high-growth company with a strong revenue base and an expanding enterprise footprint. However, key challenges have emerged that may impact its valuation and market dominance:
- Loss of Strategic Advantage: The Adobe acquisition would have solidified Figma’s position within a broader creative suite. Without that integration, Figma must compete on its own, without Adobe’s extensive resources and cross-platform synergies.
- User Retention Risks: UI3 backlash and the rise of open-source competitors could erode user loyalty, particularly among seasoned designers and enterprise teams.
- Competitive Pressure: The failure of the Adobe deal has opened the door for alternative platforms, including open-source solutions and existing competitors like Sketch and Canva, to aggressively target Figma’s discontented user base.
- IPO Prospects in Uncertain Waters: While an IPO remains a likely path forward, current user dissatisfaction and market uncertainty could complicate timing and valuation expectations.
Can Figma Regain Its Edge? Three Moves That Could Define Its Future
Figma now faces a critical period where strategic decisions will determine its ability to sustain market leadership. Potential paths forward include:
- Pivoting Toward a "Design Operating System": Expanding API integrations and leveraging AI-driven automation to differentiate from competitors.
- Addressing User Concerns with UI3: Rolling out incremental fixes or offering a hybrid UI option to restore workflow efficiency.
- Investing in Community-Driven Development: Strengthening its relationship with designers by incorporating direct user feedback into future updates.
- Competitive Positioning Against Open Source: Offering new pricing models, feature flexibility, or open-source-inspired capabilities to retain enterprise clients.
Figma remains a dominant force in the design space, but its ability to navigate these challenges will determine whether it can sustain its independent momentum or risk losing ground to rising alternatives. Investors and users alike will be watching closely to see how the company responds in the coming months.