Lina Khan points to Figma IPO as vindication of M&A scrutiny

A stunning determine is celebrating Figma’s profitable IPO: Lina Khan, former chair of the Federal Commerce Fee.

In a Friday afternoon publish on X, Khan linked to an article about Figma’s spectacular first day of buying and selling and argued the IPO is “an excellent reminder that letting startups develop into independently profitable companies, fairly than be purchased up by present giants, can generate huge worth.”

Khan was alluding to a $20 billion deal for Adobe to accumulate Figma that fell by means of again in 2023. Whereas Adobe cited the shortage of a “clear path” to approval from the European Fee and the U.Ok. Competitors and Markets Authority, the acquisition additionally confronted regulatory scrutiny in the USA over considerations that it may forestall Figma from being an “efficient competitor” to Adobe.

Khan was FTC chair on the time, main the company to problem Large Tech on fronts together with startup acquisitions — to the purpose that firms tried to keep away from this scrutiny with “reverse acqui-hires” during which they employed key workforce members and licensed expertise fairly than buying startups outright. (The apply appears to be persevering with regardless of Khan’s departure from the FTC.)

Whereas her aggressive stance led to intense criticism from corners of the tech trade, she defended her method by saying that solely a tiny proportion of offers obtained “a re-evaluation” and arguing that founders would finally profit from “a world during which you could have six or seven or eight potential suitors” fairly than “only one or two.”

And though Khan — who’d been appointed by President Joe Biden — resigned in the beginning of the second Trump administration, her feedback Friday paint the Figma IPO as a vindication for her method, calling the IPO “a win for workers, traders, innovation, and the general public.”

After all, Khan’s critics usually tend to see Figma’s success as coming regardless of regulatory scrutiny, not due to it. For instance, Wedbush Safety analyst Dan Ives instructed Enterprise Insider, “Figma is an enormous success, nevertheless it’s due to the corporate’s modern development and never because of the FTC and Kahn.”