When Adobe announced its intent to acquire Figma in September 2022 for an eye-popping $20 billion, it sent shockwaves through the digital design world. The proposed merger represented a bold move by one of the oldest and most powerful software firms to absorb the fastest-growing challenger in the UI/UX space. But after intense regulatory scrutiny and growing antitrust pressure, Adobe abandoned the deal in late 2023. Now, as of mid-2025, both companies are racing independently toward very different visions of the future — with investors, designers, and developers watching closely.

Market Capitalization: Figma Is Still Behind, But Closing In

According to the most recent valuation as of July 31, 2025, Adobe (NASDAQ: ADBE) has a market capitalization of approximately $151.73 billion, compared to Figma’s estimated valuation of $56.30 billion. Though Adobe remains nearly three times larger in terms of market cap, the gap has narrowed significantly over the past three years.

Back in 2021, Figma was valued at just $10 billion in private markets. Since then, the company has grown more than 5x in valuation — without going public — driven by viral adoption, an enterprise SaaS model, and a product that perfectly matched the remote-collaboration trend that exploded during and after the COVID-19 pandemic.

Adobe, meanwhile, has struggled to reinvent itself in the cloud-native era. While still dominant in creative software through tools like Photoshop, Illustrator, and InDesign, it has had difficulty gaining traction in the collaborative design and product development space — where Figma thrives.

Failed Acquisition Attempt: Regulatory Walls Protect the Underdog

When Adobe first made its acquisition offer, it claimed the merger would be “transformational” and create synergies across creative workflows. But regulators in the U.S. and EU saw things differently. Concerned that Adobe was attempting to eliminate its most credible challenger, both the Federal Trade Commission (FTC) and European Commission signaled strong opposition to the deal.

After nearly a year of investigations, Adobe officially canceled the acquisition in December 2023, avoiding a potentially lengthy legal battle. No breakup fee was paid to Figma, but the episode left its mark on both companies.

For Adobe, the failed acquisition was a rare defeat. For Figma, it was a public declaration of independence — reinforcing its identity as a nimble, product-first company capable of challenging Big Tech on its own terms.

Product War: Cloud-Native vs. Desktop Legacy

Figma’s rise can be attributed largely to its product superiority in the UX/UI design space. Unlike Adobe, which traditionally focused on desktop-based software with steep learning curves, Figma built a browser-native, real-time collaborative platform that became essential for remote product teams.

Figma is not just a design tool — it’s a collaborative hub for product managers, developers, and designers. With features like real-time multi-user editing, instant prototyping, and seamless handoff to development, Figma has become a foundational part of the modern product development stack.

Adobe attempted to respond with Adobe XD, but adoption has lagged. Many designers view XD as inferior in terms of usability, collaboration, and integration. Furthermore, Figma’s modern API-first approach allows seamless integration with other SaaS tools like Slack, Jira, and Notion — reinforcing its platform status.

Adoption and User Base Growth

As of early 2025, Figma is estimated to have over 4 million monthly active users globally, including teams from tech giants such as Google, Microsoft, Airbnb, and Uber. The tool has become the de facto standard for UI/UX in startups and tech-forward companies.

Adobe, on the other hand, continues to dominate in legacy creative markets like photo editing, video production, and print media. Its Creative Cloud suite is entrenched among professional content creators, but less so among digital product teams.

The diverging user bases reflect broader industry trends: Adobe remains strong among traditional creatives, while Figma wins among agile, cross-functional product teams.

Financial Model and IPO Potential

Figma has proven it can monetize efficiently. Its freemium model fuels viral adoption among individuals and small teams, while its enterprise offering (Figma Organization) brings in high-margin SaaS revenue from large companies. The company is reportedly generating hundreds of millions in annual recurring revenue (ARR), with double-digit growth rates.

Despite remaining private, Figma’s valuation has soared, now exceeding $56 billion — more than some public companies in the same space. Market speculation suggests Figma is preparing for an IPO as early as 2026, depending on macroeconomic conditions.

Adobe, meanwhile, remains profitable with strong free cash flow. However, it has faced pressure from investors to accelerate innovation and reduce its reliance on subscription price hikes. The failed Figma acquisition has heightened scrutiny of Adobe’s organic innovation strategy and long-term competitiveness.

Strategic Outlook: Two Roads Diverging

The competition between Adobe and Figma is not just a product rivalry — it’s a contest between two business philosophies.

Adobe, founded in 1982, operates like a fortress: strong brand equity, robust enterprise sales, and a suite of interlocking tools that lock users into its ecosystem. Its strength lies in depth and versatility, but it suffers from organizational inertia and slower release cycles.

Figma, by contrast, embodies the agile startup playbook: fast iterations, user-centric design, community engagement, and a laser focus on its core product. Its success has shown that modern teams value tools that are intuitive, collaborative, and seamlessly integrated into their workflows.

In 2025 and beyond, this strategic divide is likely to widen. If remote work and cross-functional collaboration continue to dominate product development — as trends suggest — Figma’s model will be increasingly attractive.

Regulatory Impact and Industry Implications

The failed acquisition attempt has broader implications for tech M&A. Regulators have sent a clear message: large incumbents cannot buy their way out of competition. For the industry, this could signal a new era where innovation thrives through independence rather than consolidation.

This dynamic benefits companies like Figma, which can raise capital, scale operations, and build influence without being absorbed by giants. It also forces incumbents like Adobe to double down on internal innovation and modernize their platforms — or risk losing relevance.

Conclusion: The Battle for Design Supremacy Is Far From Over

Adobe may still be the bigger company, but Figma has captured the imagination of the next generation of digital builders. While Adobe commands a broader product portfolio, Figma owns a critical niche — and is growing fast.

If Figma succeeds in launching a successful IPO and continues innovating at its current pace, it may soon challenge Adobe not just in design — but as a platform company. For Adobe, the challenge is to evolve without losing its creative soul.

This isn’t merely a race between two companies — it’s a bellwether for the future of software, collaboration, and how the next wave of digital products will be built.