Adobe has decided to cancel its planned acquisition of design software company Figma for $20 billion. The reason cited is the difficulty in getting approval from both the EU and the United Kingdom. The UK’s CMA (Competition and Markets Authority) had previously indicated that a significant part of Figma would need to be sold off, making the acquisition less appealing.

Last month, the European Commission had also expressed concerns about the deal. Additionally, company representatives had discussions with US officials in an attempt to salvage the agreement. This proposed acquisition, announced in September 2022, faced challenges due to increasing regulatory scrutiny over large tech companies acquiring potential competitors.

Key Takeaways

• Regulatory Scrutiny Halts Transformational Deal: Adobe’s $20 billion purchase of Figma was halted primarily due to regulatory challenges from the EU and the UK. Both countries raised concerns about potential anti-competitive effects, leading Adobe to abandon the deal.
• Gap Between Corporate and Regulatory Views: The cancellation underscores a significant divergence between corporate ambitions and regulatory oversight. While Adobe and Figma saw the merger as a means to enhance collaboration, regulators perceived it as a threat to competition and innovation in the design software market.
• Financial Implications and Market Reactions: Figma stands to benefit from a $1 billion termination fee, reinforcing its financial stability and potential for future growth, including a speculated IPO. Conversely, Adobe’s stock saw a modest rise post-announcement, indicating investor optimism despite the failed acquisition.
• Antitrust Regulators Score a Win: The collapse of the Adobe-Figma deal adds to a string of victories for antitrust regulators, who have been vigilant in preserving competition and innovation. The decision aligns with a broader trend of increased scrutiny over large tech mergers, signaling a proactive approach to maintain market diversity.

Figma’s CEO Expresses Regret Over Collapse of $20 Billion Deal with Adobe

Adobe has decided to cancel its planned $20 billion purchase of Figma, a design collaboration platform. The reason given is the challenges in securing approval from regulatory bodies in both Europe and the UK. This decision halts what was expected to be a transformative acquisition in the software industry.

While Adobe and Figma viewed the deal as a step toward enhancing collaborative creativity, regulators in multiple countries viewed it differently. To Figma’s CEO, Dylan Field, this highlighted a significant gap between corporate and regulatory perspectives on competition.

The collapse of this deal adds to a series of wins for antitrust regulators. Regulators raised concerns about Adobe’s dominant position in the design software industry when they opposed the acquisition of Figma. Buying Figma, which has gained popularity surpassing Adobe’s XD, made regulators anxious about potential stifled innovation if Figma couldn’t grow on its own.

Designers echoed these concerns after the merger announcement in September 2022. Despite these concerns, Adobe defended its position during the investigations. Authorities suggested that Adobe should divest significant source code, assets, and engineering resources to ensure fair competition. Given this growing pressure, Adobe found it challenging to finalize the deal while securing all desired Figma assets or maintaining its app offerings amid antitrust concerns.

Image source: Figma

Reports suggest that Adobe had not offered “satisfactory solutions” to address these concerns, leading to the deal’s end. In a joint statement, the companies acknowledged that they couldn’t find a feasible way to secure the required regulatory approvals in the EU and the UK. Consequently, due to the deal’s cancellation, Adobe is obligated must give a reverse terminating fee to Figma, which is $1 billion.

In a recent statement, Shantanu Narayen, CEO of Adobe, mentioned that although Adobe and Figma have differing views on regulatory decisions, both companies have chosen to pursue their goals separately. Despite their initial vision to collaborate on shaping the future of productivity and creativity, each company remains confident in its ability to seize significant market opportunities. Both Adobe and Figma remain committed to their mission of revolutionizing the digital experience for everyone.

In a separate statement, Rao contended that Adobe and Figma weren’t direct competitors at the moment. He pointed out that Adobe XD, which could be seen as Adobe’s closest offering to Figma, had struggled to gain traction recently. Rao emphasized that Adobe believed there was little customer overlap between the two companies. Furthermore, he stated that neither competitors nor customers had raised any significant concerns about the proposed acquisition.

On the other hand, In an official announcement, Dylan Field, the CEO and co-founder of Figma, states that both Figma and Adobe have mutually decided to call off their planned acquisition. Despite investing countless hours with global regulators to explain the distinctions between their businesses and the markets they cater to, they couldn’t envision a route to gaining regulatory approval.

Dylan further stated that when they announced this agreement 15 months ago, they aimed to enhance what Adobe and Figma could offer their respective user communities. Although they’re moving forward independently now, both companies remain enthusiastic about exploring future collaboration opportunities for their users.

Understanding The Reason Behind Regulatory Scrutiny

Margrethe Vestager, the Executive Vice-President overseeing competition policy, noted that both Adobe and Figma are prominent players in the software industry. They currently vie for market share in interactive product design software, essential for creating mobile apps, websites, and various digital offerings. Vestager also pointed out the potential for Figma to become a direct competitor to Adobe in photo and graphic editing tools, which are widely used for image creation and modification.

Image source: Adobe

Both companies stand out for their innovation and market success. Figma leads the way in interactive design software, while Adobe dominates the field of photo and graphic editing with its renowned Illustrator and Photoshop programs. If the acquisition had gone through, it would have effectively eliminated existing and potential future competition between them. Vestager’s team found that this would likely result in higher costs, diminished quality, or fewer choices for consumers. The focus isn’t just on present-day competition but also on preserving opportunities for innovation and rivalry in the future.

The collapse of the Adobe-Figma deal adds to a series of wins for antitrust regulators. Both the European Commission and the UK’s CMA were gearing up to challenge the acquisition formally. Meanwhile, the U.S. Justice Department has been considering its stance on the matter after discussions with both companies.

In a separate development, the European Union’s antitrust body has raised objections to Amazon’s proposed $1.7 billion acquisition of iRobot, known for its Roomba vacuums. On a different note, Microsoft successfully finalized its $68.7 billion purchase of game company Activision by making some adjustments to the deal, satisfying UK regulatory requirements.

Adobe’s Missed Merger with Figma: A Silver Lining for Most Stakeholders Involved?

While the failed Adobe-Figma deal might disappoint some private investors hoping for a successful exit, the situation has its silver linings for the key players involved. Figma isn’t walking away empty-handed; they’ll receive a hefty $1 billion termination fee. This financial boost is noteworthy, especially considering Figma’s recent growth and financial health.

Over the past year, the company has expanded its workforce significantly and is projected to increase its annual revenue by 40%, surpassing $600 million. Moreover, Figma has maintained a positive cash flow. This crucial factor could make it an attractive option for an initial public offering (IPO) in the coming years, which they are said to be considering around 2025.

Upon hearing the news, Adobe’s stock went up by 1.8%, indicating that investors view this outcome positively. Remember, when the acquisition was first announced in September 2022 at a high valuation, many were skeptical. This Figma deal was initially viewed as a strategic move for “the future of work.”

However, concerns about the hefty price and potential profit margins caused Adobe’s market value to drop by over $30 billion. Even those who supported the deal now see a silver lining in its failure. After all, Adobe’s XD, which was intended to compete with Figma, wasn’t a major focus for the company to begin with.

Lastly, let’s consider the regulators who opposed the Adobe-Figma deal. They’ve faced criticism in the past for not scrutinizing mergers enough, leading to the elimination of potential rivals in the market. This deal was seen in a similar light to Facebook’s acquisition of Instagram in 2012. The regulators’ concerns also influenced their actions against Microsoft’s purchase of Activision Blizzard and Meta’s buyout of the virtual reality firm Within.

For instance, Facebook once assured the European Commission it wouldn’t combine user data from its services, but later did so, resulting in a hefty fine. By halting the Adobe-Figma deal, regulators might have redeemed themselves somewhat. With Figma continuing to operate independently, there’s hope it could become the strong competitor to Adobe that the regulators wanted to preserve.

About Adobe

Adobe, based in San Jose, California, is a renowned American software firm specializing in multimedia and creative tools. Established in 1982 by John Warnock and Charles Geschke, the company’s name is inspired by Adobe Creek.

In its early days, Adobe focused on digital fonts before venturing into consumer software in the 1980s. Today, Adobe stands as a global frontrunner in digital marketing and media solutions. The company’s suite of tools empowers users to craft innovative digital content, distribute it across various platforms, and refine their strategies for optimal results. Simply put, Adobe assists businesses in creating, managing, and maximizing content across diverse channels and devices.

About Figma

Figma, headquartered in San Francisco, is a collaborative design platform tailored for teams working on product development. Built for seamless online use, Figma streamlines the design process, enabling teams to create, review, and finalize designs more efficiently. Whether the aim is to centralize design tools, enhance visibility, or facilitate teamwork across different time zones, Figma enhances creative workflows and ensures everyone stays aligned.

Trusted by industry leaders like Slack, Microsoft, and Airbnb, Figma has been reshaping the landscape of design by making it more inclusive and accessible to all since its inception in 2012.

Conclusion

The termination of the proposed $20 billion merger between Adobe and Figma due to regulatory hurdles signifies a complex interplay between corporate ambitions and regulatory oversight. While both companies had envisioned a partnership that could redefine the future of design software, the regulatory channel prioritized maintaining a fair and competitive market.

Figma emerges with a $1 billion termination fee, strengthening its financial position and paving the way for potential future efforts, including a speculated IPO. Adobe’s stock market response indicates investor optimism despite the missed opportunity, reflecting a belief in the company’s resilience and adaptability. As the design software industry continues to grow, the failed merger serves as an important reminder of the complex balance between innovation, competition, and regulatory scrutiny.

Frequently Asked Questions

Online retailer Zulily shutting down its operations to liquidate assets was a surprise to many. Zulily’s shutting down led to the layoffs of numerous employees after attempts to turn the business around fell short.

Founded in 2010 by Mark Vadon and Darrell Cavens in Seattle, the platform has attracted millions of daily visitors looking for unique finds for clothing, home decor, toys, and gifts, all at discounted prices, it announced on its website that it’s working to fulfill all current orders and aims to complete this within the next two weeks. For orders that can’t be fulfilled, Zulily is focused on providing refunds. They’ve also provided a contact for customers who haven’t received their orders or refunds yet.

Key Takeaways

• Closure and Job Losses: Zulily, a once-prominent online retailer, is shutting down its operations. This decision has led to the loss of over 800 jobs across three states: 292 in Seattle, 273 in Nevada, and 274 at its fulfillment center in Lockbourne.
• Asset Liquidation: The company is in the process of selling off its remaining stock to settle its debts. Douglas Wilson Cos., a San Diego-based firm, will oversee the liquidation process to maximize returns for Zulily’s creditors.
• Legal Action Against Amazon: Zulily has filed a lawsuit against Amazon, accusing the tech giant of unfair business practices. Specifically, Zulily alleges that Amazon pressured suppliers to offer less favorable terms to Zulily, thereby undermining its ability to compete effectively.
• Community Impact: Zulily, which was once a significant presence in Seattle’s tech community, has faced challenges in recent years. The closure impacts employees and creditors and raises questions about the future of smaller e-commerce platforms in a market dominated by giants like Amazon.

Image source: Zulily

Zulily Shutting Down, Causing Over 800 Job Cuts

Zulily, the online retail platform, has announced its closure, surprising both its customers and employees. Based in Seattle, the company stated on its website that it’s working to fulfill existing orders and aims to address any outstanding issues, including refunds, on January 22. They’ve also provided a contact for customers with concerns about their orders or refunds.

Once a standout in e-commerce, Zulily is now in the process of selling off its stock to settle debts as it prepares to close its doors. The company began winding down its operations recently after a 13-year stint that once captivated the tech world. However, it struggled to keep up with giants like Amazon and other online shopping platforms. Just before announcing its final sale, Zulily let go of over 800 staff members, with 292 positions in Seattle, 273 in Nevada, and another 274 jobs at its fulfillment center in Lockbourne.

In a statement on its website, Zulily confirmed it’s moving forward with a structured closure. The company has initiated an Assignment for the Benefit of Creditors (ABC), handing over the liquidation process to a third-party trustee. Douglas Wilson Cos., a firm from San Diego, will oversee the winding down and sale of Zulily’s assets, aiming to get the best outcomes for the company’s creditors. It’s worth noting that Douglas Wilson Companies is overseeing the process for Zulily.

Ryan C. Baker, Douglas Wilson Companies’ vice president, emphasized that choosing to wind down Zulily wasn’t taken lightly. Due to the tough business competition, Zulily faced and its financial challenges, immediate action was deemed necessary.

In another statement, Ryan highlighted their aim to handle the Zulily situation efficiently while ensuring the best outcomes for the company’s creditors. Baker mentioned that they’ve assembled a skilled team to manage claims and promptly respond to any queries or worries from both Zulily’s customers and creditors. Understanding the challenges these situations bring, they’re dedicated to being responsive and dependable in their role as the Assignee.

Once a notable presence in Seattle’s tech community, Zulily even sponsored the Seattle Sounders in 2019. Lately, the company gained attention for its vigorous advertising on social media.

Zulily’s move toward liquidation resulted in numerous job cuts across various states this past year. In a significant development last May, Regent, a private equity firm, acquired Zulily from its previous owner, Qurate Retail Group, known for QVC and HSN. This acquisition led to Zulily being separated from QVC, Inc.’s financial arrangements, with an outstanding debt of around $80 million settled by Qurate Retail at the time of sale.

Image source: Qurate Retail Group

Is Amazon The Reason Behind Zulily’s Shutdown?

Zulily’s closure follows the recent shutdown of Jane.com. Both struggled to compete with well-funded rivals like Amazon, Shein, and Temu. Just this month, Zulily filed a lawsuit against Amazon, alleging unfair business practices.

Ryan pointed out that the situation unfolded because Zulily had few options left.

Zulily has filed a lawsuit against Amazon, claiming the e-commerce giant used unfair tactics to undermine its business. Specifically, Zulily alleges that Amazon pushed sellers away from Zulily and restricted Zulily’s ability to offer competitive prices. These claims align with the FTC’s broader antitrust lawsuit against Amazon earlier.

The lawsuit alleges that Zulily’s suppliers felt pressured by Amazon’s pricing demands. Suppliers had to raise Zulily’s prices to match Amazon’s rates or stop doing business with Zulily altogether. Within just a year, about half of the suppliers selling on Amazon and Zulily chose to end their association with Zulily due to this pressure.

Zulily argues that its business model is straightforward – it buys products wholesale and sells them to consumers without extra charges. In contrast, Amazon operates a marketplace where retailers sell directly to consumers and pay additional fees for using the platform.

Amazon has refuted these claims from both Zulily and the FTC.

Wilson, from the legal firm handling the case, mentioned they’re reviewing the lawsuit and are committed to keeping it active. He emphasized that dropping the lawsuit isn’t on the table right now.

When Did Things Start To Tumble For Zulily?

Founded in 2010 by Mark Vadon and Darrell Cavens, who previously worked at the online jewelry store Blue Nile, Zulily saw rapid growth. By 2013, the company had attracted 12.6 million active customers and generated $331 million in revenue, a staggering increase of nearly 700% since its inception.

The company went public in 2013 with an initial valuation of $2.6 billion. By 2014, Zulily’s market worth climbed to $7 billion, backed by annual sales of $1 billion. Zulily expanded its workforce at the Nevada location, reaching around 1,000 employees, with plans to add another 600. That same year, the company revealed intentions to launch a new distribution center in Bethlehem, Pennsylvania.

Zulily’s growth momentum began to slow, and In a significant move in 2015, Liberty Interactive-QVC, later known as Qurate, acquired Zulily for an estimated $2.4 billion. Over time, challenges persisted, leading to the closure of its Pennsylvania facility and the unfortunate layoffs of approximately 500 employees in 2022.

Fast forward to 2023, the ownership of Zulily shifted to Regent, a private equity firm.

So, How Can You Reach The Team For Any Refunds Or Your Orders?

Zulily has established a dedicated team to assist customers, vendors, and other concerned parties. You can reach the Zulily ABC hotline at 8882025829, or for international callers, dial (+1) 7472886406. For more details and support, visit https://omniagentsolutions.com/ZulilyABC.

Image source: Omni

Customers can email [email protected], while vendors and other interested parties can reach out to [email protected].

Conclusion

Zulily’s decision to cease operations and liquidate assets underscores mid-sized e-commerce platforms’ challenges in a fiercely competitive market dominated by giants like Amazon. Founded with promise and rapid growth, Zulily’s journey reflects the volatile nature of the online retail landscape.

The closure, affecting over 800 employees and countless customers, also highlights the ripple effects of such business decisions on communities and stakeholders. As the company navigates its liquidation process and legal battles, it is a cautionary tale about the complexities and uncertainties inherent in the e-commerce sector. For those impacted, Zulily has provided dedicated channels for support and inquiries, aiming to mitigate the fallout from its closure.

Pay with Bank Transfer, a division of American Express, recently revealed that they have chosen Nuvei Corporation, a known fintech company, to be their first authorized acquirer responsible for promoting and delivering the innovative payment method made possible by Open Banking.

As Nuvei Partners with American Express to enable effortless A2A payments, this forward-thinking payment solution allows consumers to effortlessly conduct transactions directly from their banks, eliminating the need to put in the card attributes or undergo additional authentication procedures. PwBt provides vendors with a seamless payment experience that includes instant fund reconciliation and attractive processing charges. Nuvei will actively promote PwBt to both existing and new merchants in the UK, helping them seamlessly integrate the Open Banking approach into their e-commerce platforms.

In the UK, over 7 million users are already benefiting from direct bank account payments facilitated by Open Banking. Early adopters in sectors such as utilities and travel are recognizing the security benefits of PwBt, which makes it an appealing option for one-time high-value payments like holiday bookings as well as for streamlined and immediate bill settlements.

Key Takeaways

• PwBt Selects Nuvei as First Acquirer for Open Banking Solution: Nuvei Partners with American Express to promote and distribute its innovative Open Banking-powered payment method.
• Seamless Integration into Nuvei’s Checkout Process: Nuvei offers its customers an effortless way to integrate PwBt into their checkout process. This can be done by utilizing Nuvei’s customizable payment solution, which allows for an overview of all payment data from each customer transaction. Additionally, it simplifies payment operations, making them more efficient and streamlined.
• Enhanced Benefits for Merchants and Consumers: As Nuvei Partners with American Express, this collaboration aims to provide its merchant partners with efficient and secure payment alternatives, promoting increased conversion rates and reduced cart abandonment. PwBt’s expansion is set to contribute to the broader adoption of Open Banking solutions, fostering trust and comprehension among consumers.
• Open Banking’s Empowering Potential: Open Banking technology enables individuals to have control over their management and opens up possibilities for innovative payment solutions, like PwBt, which enhances user experience with its security and seamless operation.

Background

In a press release issued in 2019, American Express announced its plan to introduce a real-time financial transaction product for consumers in the UK. This product – PwBt – was designed to allow people to make payments for goods and services. The PwBt service is designed specifically for individuals who have bank accounts, regardless of whether or not they have an American Express card. American Express has partnered with eCommerce merchants from different industries, including well-known names like Hays Travel and Thai Airways.

Image source: Nuvei

By taking advantage of the opportunities presented by open banking regulations, the PwBt feature enables sellers to receive payments from customers who are connected to leading banks in the UK. Buyers can conveniently check their account balances and make payments online using this service. American Express recognized the potential offered by open banking and got in line to help businesses with a new, efficient, and secure way to accept online payments from their customers.

The whole structure of open banking empowers individuals with greater control over their financial management. The regulations implemented by the EU at the time facilitated the sharing of data from multiple banks, paving the way for innovative payment solutions such as PwBt. This solution recently expanded its way to a Canadian giant as Nuvei Partners with American Express to Enable Effortless A2A Payments.

Nuvei Partners with American Express to Expand PwBt’s Seamless Open Banking-Powered Solutions

PwBt provides a secure method for paying your American Express bill through a direct transfer from your bank account. It’s a user-friendly process that takes just a few simple steps, without the need for any account setup. Additionally, since your bank manages the payment entirely, you benefit from top-tier bank-level security, with none of your payment details stored by American Express.

Nuvei customers will have the opportunity to seamlessly integrate PwBt directly into their online checkout process using their existing link to Nuvei technology. Leveraging Nuvei’s adaptable and full-stack tailor-made payments solution, online businesses can optimize their checkouts and streamline their backend payment operations through a unified connection, facilitating smoother interactions and providing a consolidated picture of all payment data from every customer transaction.

The CEO of Nuvei, Philip Fayer expressed pride in extending the availability of PwBt to their merchant partners, enabling them to meet the increasing customer demand for efficient and secure payment alternatives.

He added that their goal is to facilitate closer connections between their clients and their customers through flexible payment options, regardless of location or preferred payment method. Backed by American Express but accessible to anyone with a bank account, they recognize that PwBt surpasses expectations by providing a secure and seamless service that is inclusive and user-friendly. They are excited to collaborate in extending these advantages to a wider customer base.

Image source: Nuvei

Holly Coventry, the Vice President, emphasized that in today’s digitally-driven environment, consumers seek straightforward and secure payment solutions. Merchants who understand this trend are experiencing increased conversion rates and reduced instances of cart abandonment.

The Nuvei partnership with American Express will expand the reach of PwBt to more merchants, addressing these concerns and offering additional benefits such as immediate reconciliation and appealing processing fees. This expansion will contribute to the broader adoption of Open Banking solutions, as consumers will gradually build trust and comprehend the advantages with more frequent exposure to this payment option.

All of Nuvei’s partners selling to customers in the UK now have the opportunity to seamlessly integrate (PwBt) instantly. The technology, backed by American Express but accessible to anyone with a UK bank account, enables customers to enjoy the effortless payment process while benefiting from American Express’s robust bank-level security measures.

About American Express

American Express serves as a global service company, providing a diverse array of products and services, including charge and credit card products, expense management solutions, consumer and business travel services, as well as stored value products like traveler’s cheques and other prepaid options. Additionally, the company offers network services, merchant acquisition and processing, servicing and settlement, point-of-sale systems, marketing and information solutions for merchants, and fee-based services, encompassing market and trend analyses, consulting services, fraud prevention, and the development of tailored customer loyalty and rewards programs.

Image source: American Express

The “Pay with the Bank Transfer” feature by American Express enables consumers to make direct online or in-store payments from their bank accounts. Leveraging the capabilities of open banking, this service provides financial and processing advantages to merchants while offering customers a simple, swift, and secure payment method.

About Nuvei

Nuvei operates as a financial service company, offering clients a range of payment technology solutions. Through Nuvei, businesses can access various payout options, along with banking, card issuing, fraud management, and risk management services. Leveraging Nuvei’s adaptable, expandable, and customizable technology, businesses can embrace next-generation payments, offer diverse payout choices, and tap into banking and card issuance opportunities.

By linking businesses to their customers across more than 200 markets, with localized acquisition in over 47 markets, 634 distinct payment methods, and 150 currencies, Nuvei equips customers and partners with the technology and insights necessary to thrive both locally and globally through a single integration.

Conclusion

The collaboration between Nuvei Corporation and American Express to facilitate seamless Account-to-Account (A2A) payments through the Pay with Bank Transfer (PwBt) solution marks a significant advancement in Open Banking-powered transactions. By leveraging Nuvei’s adaptable technology and American Express’s secure banking features, this partnership aims to provide a user-friendly and secure payment experience for consumers while aiding merchants in streamlining their checkout processes and enhancing transaction efficiency.

With an emphasis on enhancing financial control for individuals and delivering simplified, secure payment solutions for businesses, the integration of Open Banking technology presents an innovative and progressive approach within the fintech industry. As Nuvei actively promotes PwBt to a wider audience of merchants in the UK, the collaboration is expected to further accelerate the adoption of Open Banking solutions, enabling increased consumer trust and understanding of the benefits associated with this cutting-edge payment method.