[boroboro4]

Yes? Not everything is about capital owners and their profits. There is a lot of importance in the competition in the market and customers having choice of best products around. Figma competing with adobe is one of the examples.

Even from capital point of view everyone is now forced to make their bet - either on adobe or figma, so it’s more efficient capital allocation too.

[mattmcknight]

But how is the IPO a sign of success in that case?

[alchemyzach]

because it means they stayed independent and didnt get absorbed by a major megacorp that is already notorious for trying to corner the market of an entire industry and then over-charging

[mattmcknight]

They were independent the whole time and it wasn't considered a success. I suppose IPO is an indicator they might stay independent longer. Now that they are in the public markets even Adobe can buy a few shares. I just don't feel like the IPO event has brought any particular benefits to the consumer and Khan is incorrectly looking at post IPO stock price bounce as some kind of financial indicator that it was a better deal for the company.

[austhrow743]

That’s unrelated to the IPO.

[littlestymaar]

How? A VC-backed company must have an exit path for its investors at some point, and this exit is either:

- sell the company to a bigger player, reinforcing their dominant position (often close to monopolistic in tech).

- go to IPO, keeping the company independence and fighting power concentration.

[kgwgk]

There is a third option. (According to some LLM that will remain unnamed Vungle, Wrike, and Acquia are textbook cases of direct VC‑backed startups being bought out by private equity without an IPO or corporate acquisition. Not verified.)

[littlestymaar]

That's true, but PE is negligible in tech. And if all you can rely on for exit is private equity then you'll end up with a tech scene as dynamic as the European one…

[roenxi]

Figma is a web app. Web apps are fundamentally a hyper-competitive market because literally anyone can just throw something up on the internet if they think there is a need for it. The risk here of Adobe overcharging for it is rather low - someone would build a cheap clone.

People keep coming up with theories that companies are about to corner the market then over-charge, but the theories vastly outnumber the cases where it ever happens in practice. It is almost always that the biggest companies in the market are just more competitive (lower prices or higher quality) than all the others.

[9dev]

That is not what would happen. Figma has built a huge moat through its brand by now, and most customers would continue to use it; some of them probably already have an Adobe subscription anyway, so Adobe would naturally try to make it easier or more integrated for these customers.

A clone would need to start from scratch and compete against a huge corporation with virtually unlimited funds.

> It is almost always that the biggest companies in the market are just more competitive (lower prices or higher quality) than all the others.

That is almost always not what is happening. The big players extinguish any would-be competition early by buying them or throwing sticks into their wheels. They can afford to strategically make a loss in a given area to underbid the competition by overcharging in others, or relying on synergies. There are numerous examples where small teams built highly qualitative alternatives to corpo stuff, but had to compete against the network effects and brand names instead.

[aurareturn]

1. Figma actually lost money because their acquisition price was higher than their shares sold in the IPO.

2. Yes, Figma luckily IPOed in an extremely hot market

Getting a bit lucky doesn't mean this was a success overall. The conclusion has many more years to go before it gets written. Either way, I don't like the over reach by Lina Khan.

[franga2000]

What do you mean over reach? It's the FTC's job to prevent consumer market consolidation. Adobe is already too big and they already abuse that to the detriment of consumers. Buying Figma would make that even worse.

A company exists primarily to make things for consumers and the FTC ensures they do that fairly. The IPO, stock price and everything else is secondary.

[aurareturn]

  What do you mean over reach? It's the FTC's job to prevent consumer market consolidation.

It is over reach because it seems arbitrary.

[franga2000]

It's not arbitrary, there are many reasons to block the merger and they were explained in depth when the decision was made.

Also, the EU and UK also made it clear they were against the merger. In fact, if you look at most reporting, the EU and UK seem to be the main reason they gave up, presumably because they know the US FTC has no teeth, even with a competent chair.

[aurareturn]

Even if EU and UK wanted to block the deal, it doesn't make it the right thing to do. Free market.

I don't have a popular opinion on HN. I don't think Google should be broken up because new technology has made Google search much less needed. I don't think Apple should relinquish control over its app store because it's Apple's platform and they should do what they want. I don't think Adobe should be stopped from buying Figma because even if Adobe buys it, maybe some rich ex-employees might quit and make another competitor or make an open source alternative. Who knows.

People on HN wants the government to weaken tech companies but not when it's the tech company they're working in.

[const_cast]

> Free market

Free market requires maintenance. Laissez-faire is a lie and always has been.

If you let all the companies consolidate into mega monopolies who have a stranglehold on the market, where is the free market?

[GreenWatermelon]

Without regulations (which are laws) Dominant companies would just send gangsters to break up rival businesses. They still do that today, but through different strategies e.g. price dumping, where they operate at a loss in order to squash competition, then proceed to hike up prices and extort as much value as possible.

[Wilder7977]

For someone who believes in free market, how is it acceptable to have consolidated monopolies? The market is free when there is competition. If there is no competition there is no freedom. Of course I know that for many "free market defenders" "competition is for losers" (was it Peter Thiel?), and ultimately nobody cares of the abstract value of freedom.

[franga2000]

My point is that is is the right thing to do and multiple countries' regulators agree. Monopolies have proven themselves to be bad and consolidation is how they are created. The "free market" (as if there is such a thing) does not take care of this, because it's not profitable to compete with such a powerful incumbent. Any attempt to compete would require insane capex and have a higher price tag for consumers, who would likely have to pay it not instead of but alongside the current incumbent's price, which very few would accept. If instead, you intervene and block the merger, the company can (and is incentivised to) grow and branch out, competing with the one that tried to acquire it.

Obviously this is a YC forum and many people have a startup bias, but I'm nowhere near that scene. Many startups do even worse things than some of the big guys, because they aspire to become them. The "burn investor money to get market share at a loss, kill all competition, become a monopoly, then enshittify and make infinite money" strategy wouldn't be nearly as effective if we had proper antitrust enforcement.

[shortrounddev2]

I, too, think we should just let rich people do whatever they want!

[adastra22]

They lost money (sort-of) because the market cap was $700M less at IPO. The amount of shares sold in IPO is irrelevant.

I said sort-of because the economics of this is more complicated. Investors lose their preferences when they sell in an IPO, so this is probably better for common stock holders.

[Jolter]

Who is “they”, who lost money?

I don’t think 19.3 B is their current market cap, it’s only what was sold at the IPo. Anyway, 19.3 instead of 20 would have been no big deal IMO

Adobe certainly lost money, because they have had to compete against the better product, so have been able to charge less for their own offering. And will presumably continue to do so until further notice.

Any employees who would have been swiftly laid off after the acquisition should certainly be glad for this outcome. They still have jobs, and if there are layoffs after the IPO it will be less dramatic. If they had equity, they probably got a much better deal in an IPO, especially if they sold some of it off after the “pop”.