Lina Khan factors 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 amazing reminder that letting startups develop into independently profitable companies, somewhat 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 way 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 america over issues that it may forestall Figma from being an “efficient competitor” to Adobe.

Khan was FTC chair on the time, main the company to problem Massive Tech on fronts together with startup acquisitions — to the purpose that corporations tried to keep away from this scrutiny with “reverse acqui-hires” by which they employed key workforce members and licensed expertise somewhat 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 business, she defended her strategy by saying that solely a tiny proportion of offers acquired “a re-assessment” and arguing that founders would in the end profit from “a world by which you might have six or seven or eight potential suitors” somewhat than “only one or two.”

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

In fact, 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 advised Enterprise Insider, “Figma is an enormous success, but it surely’s due to the corporate’s revolutionary progress and never because of the FTC and Kahn.”