Amid investor qualms over the hefty price tag, Adobe Inc. decided to buy cloud-based designer platform Figma on Thursday for $20 billion. As a result, the market capitalization of the company that created Photoshop fell by more than $30 billion.

The cash-and-stock transaction would give Adobe ownership of a company whose web-based collaboration platform for ideas and brainstorming is well-liked by digital firms like Zoom Video Communications (ZM.O), Airbnb Inc., and Coinbase. It is the largest buyout of a privately-owned software startup (COIN.O).

The business of Figma, according to Adobe CEO Shantanu Narayen, is “the future of work,” and there are “tremendous prospects” to combine it with his company’s products like document reader Acrobat and online whiteboard Figjam.

For Figma’s venture capital backers, including Index Ventures, Greylock Partners, and Kleiner Perkins, the $20 billion exit represented a significant victory.

“Users of Figma will have access to Adobe’s photography, graphics, and video technology through this agreement. And Figma can provide its extensive knowledge in constructing in the browser in return “Josh Coyne, a partner at Kleiner Perkins, who made the initial investment in Figma in 2018, stated that the investment is anticipated to provide a return of over 100 times once the deal is closed.

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Less enthused investors reduced the value of Adobe’s stock by 17% on Thursday. Many of them claimed to understand the strategy’s justification, but they claimed Adobe spent too much for a business that had been valued at roughly $10 billion in a private funding round just over a year before.

Since Figma’s annual recurring revenue (ARR) was $400 million, a negligible portion of Adobe’s $14 billion, according to David Wagner, portfolio manager and equity analyst at Aptus Capital Advisors, which holds a 1.5% stake in Adobe, it was unreasonable for Adobe to pay the equivalent of 11% of its market value for 2.8% more ARR.

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Wagner stated, “We’re upset with the sum paid for the company (Figma).”

Three years after the deal’s conclusion, according to Adobe, the acquisition should increase its earnings. It also predicted that by 2025, the design, whiteboarding, and collaboration segments of Figma’s total addressable market will amount $16.5 billion.

One of the most opportunistic corporations in Silicon Valley, Adobe has acquired a number of companies as it has sought to protect its market share from rivals over the years.

Prior to Figma, their greatest acquisition was the $4.75 billion purchase of the software company Marketo in 2018.

In order to narrow its focus on collaboration tools, it has also acquired several businesses over the previous 24 months, including video collaboration software Frame.io, social media marketing start-up ContentCal, and collaboration tool provider Workfront.

In 2023, the transaction is anticipated to close, pending regulatory approval.

Co-founder and CEO Dylan Field will remain in charge of the San Francisco-based Figma, which will continue to run independently. If the acquisition is cancelled, each company will be required to pay a $1 billion termination fee.

According to Refinitiv statistics, Adobe’s anticipated fourth-quarter sales of $4.52 billion was less than the $4.58 billion experts had predicted.

The company’s third-quarter profit decreased by over 6% as a result of rising costs and a stronger US dollar.