Before Figma Goes Public, Should You Double Down on Adobe or Bet on the Underdog?

What's particularly noteworthy is After a long drought, the initial public offering (IPO) market seems to be springing to life

One of the most anticipated debuts is from the creative software company Figma, which is expected to go public as early as late July

Let's take a look at both companies to see which is more deserving of investors' capital, given the current landscape

How we got here When Adobe announced its plan to acquire Figma, much ary was generated the move and its associated price tag of $20 billion

To some, it seemed an expensive but necessary move to bring a rival's software offering under Adobe's suite of ducts

Nevertheless, To others, it was an admission that Adobe was losing ground to newer entrants in the creative software space

Additionally, In the end, it didn't end up mattering as the deal fell apart and Figma remained private

Image source: Getty Images

Software showdown Figma offers web-based collaborative design tools that can be used for a variety of design tasks, including creating flyers, mobile app interfaces, and web designs

At its core, Figma offers many of the same tools available to rs of Adobe's creative suite of software, including applications Photoshop and Illustrator

Moreover, However, the focus should be on how the ducts differ

Figma is web-based, meaning it will work in a web browser

However, Adobe's ducts are applications that need to be downloaded, considering recent developments

There's also a substantial collaboration feature offered by Figma that doesn't exist in the Adobe suite

In contrast, It doesn't take a genius to see how a duct that allows users to easily work on any device that has a web browser while seamlessly collaborating with others would be a compelling challenger to an incumbent Adobe

That said, there's more to consider before making a bet on this new IPO, in today's financial world

Additionally, Meanwhile, Adobe has a substantial reputational and incumbency advantage (which is quite significant)

In the fessional world and at the enterprise level, the Adobe software suite is substantially entrenched

Additionally, That's not to say it can't be disrupted, but it's an uphill climb

Additionally, both Figma and Adobe are building AI features into their ducts

Considering the cost of implementing AI, it's worth considering how much of a burden this would have on a smaller company Figma compared to the deeper-pocketed Adobe

Moreover, The bottom line for investors There's a case to be made that a web-based collaborative platform Figma is perfectly positioned to take from the entrenched Adobe

In that sense, the excitement around Figma's IPO makes sense

Furthermore, In contrast, However, it's ly too early to declare the downfall of Adobe

Its incumbency advantage will be tough to disrupt, and as long as the race for AI continues, those spending requirements favor Adobe and its larger size and strong balance sheet.