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| Lina Khan celebrated Figma's IPO with a nod to the failed Adobe merger. Kevin Dietsch/Getty Images |
When Adobe abandoned its $20 billion bid to acquire Figma in late 2023, many in Silicon Valley considered it a regulatory overreach one that might stunt innovation, reduce investor confidence, and punish startup founders. At the center of the storm was Lina Khan, the then-chair of the Federal Trade Commission, a prominent and polarizing figure in the movement to rein in Big Tech through antitrust enforcement.
Fast forward to mid-2025, and Figma’s stunning public debut has flipped the narrative.
The design software company not only weathered the collapse of the merger it thrived. Its IPO this week was nothing short of a blockbuster: priced at $36 per share, Figma closed its first trading day at more than $90, pushing its valuation to nearly $68 billion. A windfall for investors, a victory for employees, and, for Khan and her regulatory philosophy, a moment of vindication.
"A Win for the Public": Khan’s Celebration and Its Symbolism
Lina Khan, no longer at the helm of the FTC, took to X (formerly Twitter) on Friday morning with a tone of triumph:
“A great reminder that letting startups grow into independently successful businesses, rather than be bought up by existing giants, can generate enormous value. A win for employees, investors, innovation, and the public.”
This was more than a casual congratulation it was a victory lap for an ideological and regulatory shift that Khan championed during her tenure from 2021 to 2025. For years, the FTC under Khan’s leadership took a hard line on mergers that could concentrate power in the hands of tech giants. In Adobe’s case, the fear was that acquiring its most promising design competitor would reduce future competition in a critical segment of creative software.
The IPO’s success suggests that at least in this case the critics were wrong.
A Timeline of a High-Stakes Battle
Figma’s trajectory is one of meteoric rise. Launched in 2016 as a web-based collaborative design platform, the company quickly gained traction with designers and developers alike, offering a cloud-first, real-time alternative to Adobe’s aging Creative Suite tools. By the time Adobe came calling in 2022, Figma was a rising star with a fast-growing customer base and a disruptive product.
Adobe’s $20 billion acquisition offer was hailed by some as a strategic masterstroke and by others as an admission that Adobe couldn’t innovate quickly enough on its own. The FTC and the European Commission, however, were less impressed. Concerns mounted that the merger would effectively eliminate Adobe’s strongest emerging rival.
In December 2023, amid mounting regulatory pressure and no clear path to approval, Adobe and Figma walked away from the deal. Adobe paid a $1 billion termination fee.
At the time, skeptics warned that Figma would struggle to reach its full potential alone. But the company doubled down on growth, revamped its pricing model, and ramped up enterprise sales. Less than two years later, the IPO speaks for itself.
What Figma Proves About the Antitrust Argument
Khan and her supporters argue that Figma’s post-breakup success illustrates what can happen when regulators protect competition instead of allowing dominant players to consolidate power.
“This is exactly the scenario we want to enable,” one former FTC staffer told Truth Sider under condition of anonymity. “A competitive landscape where startups can challenge incumbents, go public, and continue innovating on their own terms.”
Khan’s approach has been consistent. She argued that many acquisitions in Big Tech are not about synergy or scale they’re about neutralizing potential future competition. In this view, Figma wasn’t just another deal. It was a test case for a new era of aggressive antitrust enforcement aimed at maintaining long-term market dynamism.
The IPO’s success appears to affirm that theory, at least this time.
The Critics Push Back
Not everyone is ready to call this a victory for regulators.
Dan Ives, a tech analyst at Wedbush Securities, was blunt: “Figma is a massive success, but it's because of the company's innovative growth and not due to the FTC and Kahn.”
Louis Lehot, a partner at Foley & Lardner who specializes in tech M&A, offered a more nuanced take. He acknowledged that Figma’s independent success is admirable, but argued that the Adobe-Figma merger could have delivered complementary benefits pairing Figma’s innovative platform with Adobe’s distribution power.
“There’s a hint of schadenfreude in celebrating independent success while dismissing the potential upside of the Adobe-Figma merger,” Lehot said.
For critics, the IPO doesn’t invalidate the broader argument that strategic acquisitions can also fuel innovation, help startups scale faster, and unlock greater returns. In their eyes, there’s no reason that Figma’s success and the value of a well-executed merger must be mutually exclusive.
The New Regulatory Playbook: Encouraging IPOs Over Exits
In Silicon Valley, the default dream for many founders has long been acquisition. Building a “venture-scalable” business often meant building to sell. But Khan’s FTC and this Figma milestone may be helping to nudge that dream toward IPOs once again.
By signaling that large acquisitions may not go through, regulators are implicitly encouraging founders to consider going public instead of seeking a buyout. The Figma outcome reinforces that this can be a lucrative path, not just an idealistic one.
Startups, investors, and even VCs may begin to hedge differently. The message: If you can’t rely on being bought by a Big Tech firm, you might as well build for the long haul.
A Legacy Moment for Lina Khan?
Lina Khan’s tenure at the FTC was nothing if not controversial. She brought lawsuits against Amazon, Meta, and attempted to block Microsoft’s acquisition of Activision Blizzard (which ultimately went through). Her philosophy: vigorous enforcement of competition laws is necessary to check the power of tech giants.
Her critics accused her of overreach, legal sloppiness, and of chasing headlines more than results. And indeed, some of the FTC’s high-profile cases have struggled in court.
But Khan’s defenders say she reframed the national conversation on tech consolidation and Figma’s IPO, they argue, proves her long game is working.
“This is about shifting the baseline,” said a former FTC colleague. “Showing that we don’t have to default to consolidation that there’s a real path for startups to thrive independently, and even outperform the incumbents.”
Whether that shift endures beyond her tenure will depend on both political winds and future market outcomes.
What This Means for Future M&A in Tech
The Figma case sets a powerful precedent. Regulators may now be emboldened to challenge other large acquisitions under the theory that independent success is not only possible it can be more beneficial for consumers and innovation.
On the flip side, Big Tech firms may grow more cautious about pursuing high-profile acquisitions, fearing expensive breakups and regulatory blowback.
There could also be broader effects on venture capital and private equity. If the path to IPO becomes more normalized and more rewarding it may reshape funding timelines, investor expectations, and the overall startup ecosystem.
Some experts even suggest we could be witnessing a slow shift away from the “acquire-or-die” startup culture that has dominated Silicon Valley for the last two decades.
One Deal, Many Messages
The end of the Adobe-Figma deal was seen by some as a regulatory blockade and by others as a long-overdue course correction in tech M&A. Nearly two years later, Figma’s IPO delivers a clear signal: independence can pay off in billions.
For Lina Khan, it’s a moment to underscore what she’s been arguing all along: that competition, not consolidation, is the engine of innovation.
For the tech industry, it’s a reminder that the rules of the game are changing and that success doesn’t always require an exit.
