Adobe has recently announced that they are cancelling their $20 billion deal to acquire Figma, the web-based collaborative platform, due to regulatory roadblocks stemming from antitrust approvals in Europe and the UK.

The cash-and-stock deal, announced in September last year, was the latest to draw tough scrutiny from regulators worried about Big Tech acquisitions that boost the market power of dominant companies or involve startups seen as nascent rivals.

Adobe will pay a termination fee of $1 billion to San Francisco-based Figma, whose web-based collaborative platform for designs and brainstorming is used by Uber, Coinbase, Zoom Video Communications and many other firms.

Figma has expanded its team from 800 to 1300 people in the past year, and is expected to grow its annual recurring revenue by 40% to over $600 million this year, a source familiar with the matter said. The company has also been cash-flow positive, an important metric for public market investors to evaluate potential IPO candidates.

Both Figma and Adobe have benefited from the generative AI craze, as Figma launched new features as it expanded into software development, and Adobe has released generative photo tools such as Adobe Firefly.

Britain's Competition and Markets Authority (CMA) last month said the deal would harm innovation for software used by the vast majority of UK digital designers, echoing similar concerns from the EU on the potential reduction of competition.