Figma Ditches Adobe, Files IPO, Picks a Fight Over Dev Mode

Figma is officially moving on.

Fifteen months after announcing a $20 billion acquisition deal with Adobe, the design software company publicly confirmed that the two firms have called it off. In a statement, Figma co-founder and CEO Dylan Field said that despite “thousands of hours spent with regulators around the world,” both companies no longer saw a viable path to approval. The decision comes after intense antitrust scrutiny in both the EU and the UK, which brought the largest proposed acquisition of a design startup to a halt in December 2023.

But if Adobe’s exit marked the end of one chapter, Figma wasted no time writing the next one.

On Tuesday, the San Francisco-based company revealed it had confidentially filed for an IPO, signaling a return to independence and ambition. Though details remain sealed until the filing becomes public, the timing is bold. Figma’s last valuation stood at $12.5 billion, based on a May 2024 secondary share sale that gave early investors and employees a chance to cash out. Its roster of backers—Sequoia Capital, Greylock, Index Ventures, Kleiner Perkins, Andreessen Horowitz, IVP is packed with names known for steering their portfolio companies toward public markets.

Still, going public is just one part of Figma’s broader activity in recent months.

Even as it prepares for life as a standalone public company, Figma appears keen to influence the broader creative software space, this time, not as an acquisition target, but as a competitor with reach. Adobe, its onetime suitor, recently made headlines with a strategic investment in Synthesia, the UK-based AI video generation platform. Synthesia claims to serve over 70% of the Fortune 100 and just hit $100 million in annual recurring revenue. Its CEO Victor Riparbelli characterized Adobe’s investment as validation of a shared goal: “democratizing high-quality content creation.”

While Adobe sets its sights on enterprise AI video, Figma has been working to enhance its own AI capabilities. Over the past year, it launched several new products, Dev Mode, Variables, Advanced Prototyping and completed the acquisition of Diagram, an AI startup. The push reflects not only a response to AI-native competitors but also a shift in user expectations. Field has said that while rapid prototyping with AI is powerful, what users really need is a bridge between ideation and execution.

That bridge is now being built by a growing set of rivals.

Nowhere is this more visible than in Figma’s simmering conflict with Lovable, an early-stage Swedish startup built around the concept of “vibe coding” where users describe a product in natural language and the system generates both the code and interface. Lovable recently introduced a feature called “Dev Mode,” triggering a cease-and-desist from Figma, which holds a trademark on the term.

On the surface, it’s a classic IP dispute. But the context makes it more complicated. “Dev mode” is a common shorthand across the software industry, found in tools from Google, Apple, Microsoft, and countless open-source projects. Figma’s trademark only applies to the stylized phrase “Dev Mode,” not the generic “developer mode,” yet critics argue that such a claim amounts to overreach.

Lovable’s CEO Anton Osika hasn’t backed down. In an interview with TechCrunch, he said the company has no plans to rename the feature. He also took a jab at Figma’s focus on legal posturing instead of product innovation, saying Lovable continues to win customers away from legacy design tools.

Figma, for its part, said it hasn’t sent similar letters to companies like Microsoft because those products fall under “a different category of goods and services.” That admission only reinforces the competitive undertone of the dispute: Lovable is being taken seriously.

Ironically, the two companies are also linked through a shared workflow. A new integration with Builder.io allows users to export Figma designs directly to Lovable, creating a seamless flow from mockup to full-stack app, no developers required. 

Just seven months ago, a Reddit thread from a group of laid-off designers painted a different picture locked out of Figma before being told they’d lost their jobs, unable to retrieve years of design work that now lives behind corporate firewalls. For some, it was their first job out of college and now they’re job hunting without portfolios.
Regulators had expressed concern that Adobe’s acquisition would eliminate a key competitor, pushing both companies to consider divesting core products like Adobe’s Photoshop or Illustrator, or even Figma Design itself. This comes at a time when Trump’s aggressive trade tariffs have already rattled public markets, leading to the delay of major IPOs like Klarna and more.