The Adobe-Figma Split: Why it’s not a Sign of the Future for Startup M&A

Adobe has called off its deal to acquire Figma for $20 billion due to regulatory concerns in the EU and the United Kingdom, adding yet another data point to worries that the stricter stances taken by the world’s governments regarding competition rules may negatively impact startup exits.

Venture capitalists and founders were already worried about exits after Visa’s $5.6 billion acquisition of Plaid in 2020 was canceled after a tough battle with regulators. The appointment of Lina Khan, known for her antitrust research and agenda, as the chairperson of the Federal Trade Commission in 2021 didn’t do anything to quell those concerns.

Still, Figma and Plaid are only two examples of startups being impacted by antitrust and competition regulations in recent history. Yet, since the Adobe-Figma news broke this morning, discourse is already leaning towards how this will hurt startup liquidity; some VCs are even saying that large startup acquisitions are going to be off the table.

But if you look at the data around startup M&A, that sentiment feels more like fear mongering than an actual reflection of what the startup exit market looks like. In fact, the vast majority of startup deals look nothing like the Figma or Plaid deals.

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