Latest news with #FigmaMake
Business Insider
4 days ago
- Business
- Business Insider
Former Takeover Target Threatens Adobe's (ADBE) Clould Creativity Empire
Adobe (ADBE) is poised to encounter increased competitive pressure, partly of its own making. Figma, the cloud-based design platform that Adobe sought to acquire in 2023, is preparing for a $1.5 billion initial public offering (IPO). This move will enhance Figma's access to capital, providing critical support for its continued growth and market expansion. Don't Miss TipRanks' Half-Year Sale Take advantage of TipRanks Premium at 50% off! Unlock powerful investing tools, advanced data, and expert analyst insights to help you invest with confidence. Make smarter investment decisions with TipRanks' Smart Investor Picks, delivered to your inbox every week. Notably, Adobe was required to pay a $1 billion breakup fee following the failed acquisition attempt. The timing of Figma's IPO is particularly significant, as Adobe's revenue growth has slowed from 15–25% in previous years to just 11%, contributing to recent pressure on its stock performance. Additionally, there is growing sentiment that generative artificial intelligence (AI) tools may be narrowing Adobe's competitive moat. However, Adobe remains proactive in defending its leadership in the creative software space, leveraging its innovation capabilities and extensive ecosystem. Given the balance of emerging risks and potential opportunities, I maintain a Neutral outlook on ADBE. Figma's Ascent: A Formidable Competitor Emerges Figma officially filed for its IPO with the SEC via an S-1 registration statement earlier this month, marking a significant milestone for the fast-growing design platform. Its business is thriving—revenue surged 48% to $749 million in fiscal year 2024, with first-quarter revenue rising 46% year-over-year to $228.2 million. A net dollar retention rate of 132% reflects strong customer loyalty and product engagement. Adobe's interest in acquiring Figma in 2022 now seems even more justified. However, the deal was terminated a year later amid regulatory antitrust concerns, resulting in a $1 billion breakup fee paid to Figma. This infusion of capital further strengthened Figma's ability to scale independently. Best known for its browser-based, real-time collaboration tools, Figma has since expanded into adjacent offerings, including Figma Sites (no-code website creation), Figma Make (AI-driven code generation), and Figma Draw (vector editing)—many of which directly compete with Adobe products, such as Illustrator. While Figma's scale is still modest compared to Adobe's 2024 revenue of $21.5 billion, it remains a formidable challenger in the creative software space. Its IPO is expected to accelerate its growth trajectory and broaden its market presence. AI Threatens to Democratize Creativity In addition to competitive pressure from platforms like Figma and Canva, the creative software industry is being rapidly reshaped by the rise of generative AI tools such as Midjourney, OpenAI's Sora, and RunwayML. These solutions are particularly valuable in the early 'ideation phase' of content creation and are widely accessible, with pricing ranging from $20 per month to $1,500 per year. Their growing influence on Adobe's traditional offerings is significant. Many argue that these tools are democratizing creative capabilities, lowering barriers to entry for individuals and small teams. With tens of billions of dollars being invested in AI innovation, even an industry leader like Adobe may find it increasingly challenging to maintain its competitive edge in this rapidly evolving landscape. Adobe's Counter-Offensive: Firefly and AI Integration That said, Adobe is actively incorporating AI to enhance its product offerings. At the center of its AI strategy is Firefly, a suite of generative tools that includes features such as generative fill and expand, AI-assisted workflows, and text-based editing. A key differentiator is Adobe's emphasis on the commercial safety of Firefly, positioning it as a more secure alternative to other generative AI tools—such as those from OpenAI—which have faced concerns around copyright and content sourcing. This focus on reliability and legal clarity appeals particularly to enterprise clients and established organizations that prioritize compliance and risk mitigation, even at a premium. Additionally, Firefly is integrated with major partners, including Google Cloud and OpenAI, expanding its reach and functionality within Adobe's ecosystem. Financial Fortitude: Adobe's Stable Foundation surpassing 37 million paid subscribers by the end of 2024, according to the most recent data sourced by TipRanks. Flagship products, such as Photoshop, continue to be widely adopted by creative professionals worldwide. From a financial standpoint, Adobe is performing exceptionally well. In the second quarter of fiscal year 2025, the company posted record revenue of $5.87 billion. Operating cash flow reached $2.19 billion, representing a robust margin of 37.3%. High margins remain a key strength for Adobe, with a free cash flow margin of 36.83%—significantly outperforming the Information Technology sector median of 11.66% by over 215%. Despite these strong fundamentals, Adobe trades at a relatively modest valuation. Its current Price-to-Earnings ratio of 24.3 is below the sector median of 29.19, suggesting that the market may be factoring in expectations of slower growth ahead. What is the Price Target for ADBE? On Wall Street, the consensus rating on ADBE is Moderate Buy based on 19 Buy, seven Hold, and two Sell ratings in the past three months. T he stock's average price target of $484.88 implies a 26% upside potential over the next twelve months. Following Adobe's fiscal second-quarter results, Citi lowered its price target on ADBE from $465 to $450 while maintaining a Hold rating. The firm acknowledged Adobe's initial progress in monetizing AI as encouraging but expressed caution, citing uncertainty around the sustainability of its AI-driven growth. Citi pointed to fluctuating pricing strategies in fiscal 2025 and what it described as a 'seemingly diminishing' market and mindshare for Adobe's AI models as key concerns. Adobe at a Crossroads: Maturing Growth Meets Rising AI Competition Adobe faces a range of challenges. Growth in the creative software market appears to be entering a mature phase, which has weighed on investor sentiment and stock performance. The market no longer prices ADBE as a high-growth stock; its P/E ratio—once consistently around 50 since 2015—has been roughly halved. The failed acquisition of Figma may also have long-term competitive implications. Additionally, the rise of generative AI tools poses a threat to Adobe's moat, particularly among individual creators and small to mid-sized businesses. That said, Adobe remains a highly profitable enterprise and a trusted leader in the creative software market, which is projected to grow at a 7.1% annual rate. The company's efforts to adapt—highlighted by its AI-driven Firefly platform—demonstrate its commitment to innovation and relevance in a rapidly evolving landscape. Combined with a more reasonable valuation, these strengths make it challenging to adopt an overly bearish stance. All things considered, my outlook on ADBE is Neutral.
Business Insider
7 days ago
- Business
- Business Insider
Figma investors say going public is a better outcome than its abandoned Adobe deal
As design software company Figma eyes a much-anticipated public offering, investors say the failed $20 billion deal with rival giant Adobe may have been a blessing in disguise. In 2023, Adobe abandoned plans to acquire Figma, following antitrust pushback in the UK and EU. The deal also led to the ire of some in the design community at the time, weary of price hikes and slowing innovation. Less than two years later, Figma filed to go public on July 1. Business Insider spoke with three investors, who asked to remain anonymous during the quiet period before Figma's initial public offering. They said that the abandoned deal reinvigorated innovation at Figma, which now faces a fresh wave of opportunity thanks to AI. "I always believed that the company had a chance to build a much bigger business than the Adobe deal," one Figma investor told BI. When the deal fell apart and Figma collected a $1 billion breakup fee, it represented a "crucible moment," that investor said. In addition to offering buyouts and resetting its valuation, Figma reinvigorated its products, the investor said. Figma launched four new products at its annual Config conference in May, doubling its catalog. "The people who remained in the boat really went to work, and it showed up in the financial metrics," that investor said. "It showed up in the new products." Another factor in Figma's corner in realizing its full potential as an independent firm? The AI wave, which had yet to fully materialize in 2023. "Dylan's vision was always to bridge the gap between imagination and reality, and AI only further accelerates that," a second investor told BI, nodding to Figma Make — a tool allowing users to make prototypes and web apps through conversational prompts. That investor also said Figma has unique potential as a stand-alone company, given that it works with 95% of Fortune 500 companies. "Staying founder-led has been a real advantage," that investor said. Though the price tag from the Adobe deal was massive, "the exciting and desired outcome always was for it to be a public company," a third investor said of the deal's collapse. During talks with Adobe, Figma entered something of a limbo period, the third investor said, affecting the kinds of hires it made who would go on to become Adobe employees and the kinds of products it developed, so as not to step on its acquirer's toes. Figma's proposed IPO is one of the most hotly anticipated following a pullback within the tech IPO market in recent years, though companies like Chime, Circle, CoreWeave, and ServiceTitan have recently undergone successful offerings.
CNBC
14-05-2025
- Business
- CNBC
Databricks is buying database startup Neon for about $1 billion
Data analytics startup Databricks said Wednesday that it's buying Neon, a cloud-based database software vendor, for about $1 billion. It's the latest big deal for Databricks, which bought artificial intelligence model training startup MosaicML for $1.3 billion in 2023 and paid over $1 billion last year for data optimization startup Tabular. Neon has over 18,000 customers, Databricks said in a statement. Clients include OpenAI, Adobe, Boston Consulting Group, Replit and Vercel, according to Neon's website. Many developers have flocked to Neon, which is open source and billed as an alternative to top cloud provider Amazon Web Services' Aurora Postgres database service. The open-source PostgreSQL database originated in the 1980s. Supabase, a startup whose tools have become popular with "vibe-coding" tools such as Lovable and Figma's recently announced Figma Make, is also based on PostgreSQL. Cloud providers Google and Microsoft have their own options for running PostgreSQL databases. Databricks sells software that can help with cleaning up data, executing queries and running AI models. Microsoft, Snowflake and Databricks have all invested in Neon, whose co-founder and CEO is former Meta and Microsoft engineer Nikita Shamgunov. After leaving Meta, Shamgunov ran database startup SingleStore, formerly known as MemSQL. Neon charges based on the amount of computing and storage each customer uses per month. Its software can run in Amazon and Microsoft's clouds. Founded in 2021, Neon is a distributed company, with over 130 employees, according to a job description. Databricks, based in San Francisco, was founded in 2013 and was valued at $62 billion in a $10 billion financing announced in December. Some of the money was earmarked for acquisitions.
The Hindu
09-05-2025
- Business
- The Hindu
Figma launches AI tool for building apps and websites
Design application Figma has announced a host of new features including an AI tool called Figma Make that can build websites and apps. Users simply need to 'vibe code' their way through, by entering a prompt with the description of what they want in the website. Users can then even make changes to the design elements later after the website has been published. There are drop-down menus for different elements which are easier to access while making changes instead of asking the AI model. The tool is powered by Anthropic's Claude 3.7 model. The platform will also have a content management system for users to generate blog posts from the site. Users can edit posts within the blog while also being able to edit thumbnails and slugs. Vibe coding tools have become increasingly popular with players entering the space. OpenAI has reached an agreement to acquire vibe coding startup Windsurf while it was also reported that Apple and Anthropic had partnered to develop an AI coding platform. Figma has also released another new tool for marketers called Figma Buzz which can be used to make templates for brand creatives. They can also use AI-generated images or edit the background for assets. These tools essentially help marketers when they're working with bulk clients. There's also Figma Draw for vector editing and making illustrations, with new features like pattern fill, brushes, adding noise and texture etc which have been added to the tool. The company is also reportedly testing Figma Sites that converts designs into working websites which will support AI code generation ability within the next few weeks. A few weeks ago, Figma also became one of the platforms to integrate OpenAI's upgraded image generation model.
TechCrunch
07-05-2025
- Business
- TechCrunch
Figma releases new AI-powered tools for creating sites, app prototypes, and marketing assets
Design company Figma today announced multiple features, including AI-powered site and web app creation, a way for marketers to create assets in bulk, and a new drawing tool. With this launch, the company is taking on other creative solutions such as Canva and Adobe, along with AI-powered website and prototype creators such as WordPress, Wix, Hostinger, and Replit. The company's website creation tool is called Figma Sites. The startup said that often designers build prototypes of what a site should look like within Figma. With the new AI-powered tool, they can easily create websites and even publish them. Once the site is generated, collaborators can easily change elements of the site through an editor without prompting. Users can also add transitions, animations, and scroll effects while making the site responsive. Figma is adding the ability to directly generate blog posts from its site. That means the Sites will have a content management system (CMS), which is an upcoming feature, baked in that lets users edit posts within the design of a blog and also manage other assets such as thumbnails and slugs. For interactive elements like stock tickers, you can add custom code or use AI to generate code for you. Figma Make, on the other hand, is a similar AI-powered tool, which is geared more towards ideation and prototyping. Users can input a prompt to create a web application. The prototype app is collaborative, and users can prompt the assistant to change or add certain elements. Plus, if there is a developer on the team, they can directly modify the code to make necessary changes. Users can also generate small interactive elements, such as a clock, and embed them in the pages published through Figma Sites later. Yuki Yamashita, chief product officer at Figma, said that both products share a lot of features and underlying technology. Techcrunch event Exhibit at TechCrunch Sessions: AI Secure your spot at TC Sessions: AI and show 1,200+ decision-makers what you've built — without the big spend. Available through May 9 or while tables last. Exhibit at TechCrunch Sessions: AI Secure your spot at TC Sessions: AI and show 1,200+ decision-makers what you've built — without the big spend. Available through May 9 or while tables last. Berkeley, CA | BOOK NOW 'We want to enable high-fidelity prototyping with Figma, especially with Figma Make. You can add more data to it and try to see how viable an idea is in terms of final implementation. Whereas Figma Site is useful for a marketing and design team when they exactly know how a site should look and take full control of that,' Yamashita told TechCrunch while describing the differentiation between these products. Image Credits: Figma Multiple companies in different sectors are looking for a way to create interactive experiences using AI. Website hosting providers such as Squarespace, Wix, WordPress, and Hostinger have released tools to let users easily create websites through AI. On the other hand, tools like Replit and Lovable are pushing users to create apps or prototypes without coding knowledge. Last month, even Canva released a way to create interactive experiences within its designs with Canva Code. This isn't the first foray for Figma into prototyping, though. Last year, it released a Make Design feature, which had to be pulled after users accused the company of heavily training the tool on existing apps. What's more, Figma is releasing a new tool for marketers called Figma Buzz. With these tools, marketers can easily use templates created by designers with brand-specific designs to make new creatives. They can also use a tool to insert AI-generated images or change the background of certain assets. Marketers can also create assets in bulk using data from sources like spreadsheets. The startup is also launching a tool called Figma Draw for vector editing and illustrations. Yamashita said that designers often had to export their vector designs outside Figma to make edits. The company is now adding features like text on a path, pattern fill, brushes, multi-vector edit, adding noise and texture, and a lasso selection to its Draw product. Image Credits: Figma Figma launched its Slides tool for creating presentations last year. With the new asset creation and drawing tool, the company is directly competing with creative suites such as Adobe and Canva. Yamashita denied that the company is directly competing with these creative tools. He said that Figma is in the business of building digital products, and a third of the company's users are developers, thanks to tools like Dev Mode. The company is announcing a new plan called a content seat starting at $8 per month, which will give users access to Figma Buzz, Slides, FigJam, and Sites CMS.
