Adobe abandons XD following Figma acquisition collapse

Adobe Inc. announced that it will no longer pursue further development of its Adobe XD web design product following the failure of its proposed $20 billion acquisition of Figma Inc. in December 2023.

Prior to the planned acquisition, Adobe had placed XD in maintenance mode, halting new feature development and individual sales. With the deal now officially off the table, the company has confirmed that it has no plans to resume investments in XD or introduce a new competitor in the immediate future.

"We have no plans to further invest in XD," said an Adobe spokesperson on Tuesday.

This decision comes amidst Figma's continued market dominance in the web design space. Adobe General Counsel Dana Rao previously disclosed in 2022 that XD generated only $17 million in annual recurring revenue and had a limited development team of 19 individuals.

Despite abandoning XD, the collapse of the Figma acquisition frees up significant resources for Adobe. Wall Street analysts are now speculating whether the company will redeploy these funds toward alternative competitive strategies within the product design software market. Adobe has indicated that it remains open to exploring potential partnerships with other companies in the space.

The future of Adobe's web design initiatives remains unclear, but the company's decision to abandon XD marks a significant shift in its approach to this competitive segment.