Design software maker Figma's shares surge 158% in blowout market debut
Empower your mind, elevate your skills
Figma's shares surged nearly 158% in their market debut on Thursday valuing the design software maker at about $50 billion, setting the stage for a flurry of high-growth tech listings and strengthening a rebound in the IPO market.The US initial public offerings market has bounced back after tariff-driven volatility briefly paused listings in April, putting 2025 on track to end a nearly three-year dry spell.Figma's valuation at debut far exceeds the $20 billion price tag from a now-abandoned buyout deal with industry giant Adobe in December 2023."Fast-growing software IPOs have been extremely rare during the past three years, so deals like this tend to get a lot of attention," said Matt Kennedy, senior strategist at Renaissance Capital, a provider of IPO-focused research and ETFs."Because of this three-year bottleneck, tech IPO investors have been starved for new deals."The stock opened for trading at $85 apiece on the New York Stock Exchange, compared with the initial public offering price of $33.Recent tech IPOs have drawn strong investor interest and delivered solid post-listing gains, fueling optimism around new offerings from high-growth and AI-focused firms."From a private markets perspective, Figma's IPO is a bellwether event for the tech sector," said Derek Hernandez, senior analyst, emerging technology at PitchBook.Figma makes collaborative design software used to build websites, apps and digital products, and customers include streaming giant Netflix, travel firm Airbnb and language learning app Duolingo.Its prominent backers include Silicon Valley venture capital giants Kleiner Perkins and Sequoia."If you look at Figma's positioning around AI, and the ability to deliver massively improved experiences to its customers with AI, that was not obvious back in 2022," said Andrew Reed, a partner at Sequoia Capital and a board member of Figma.Sequoia Capital first invested in Figma at $1.10 a share during the company's Series C round. With Figma pricing its IPO at $33 a share, Sequoia stands to make a significant return on its roughly $150 million investment, according to a source familiar with the matter.Meanwhile, the broader markets touched new record highs on Thursday as Microsoft's blockbuster earnings fueled investor confidence in Big Tech's hefty investments in artificial intelligence.Design software firms are racing to integrate generative-AI tools that automate tasks such as image creation, layout suggestions and code generation, as companies jostle to win enterprise clients and creative teams.Figma, in its IPO filing, flagged intense competition, particularly from rapid AI adoption, as a potential headwind, warning it could cede market share."We've embedded different flavors of AI - both to lower the floor (and) allow more people to participate in the design process - while also raising the ceiling for individuals (and) for companies to be able to have even more high craft in what they're creating," said Chief Financial Officer Praveer Melwani.The effort has accelerated since Adobe, Microsoft and others began rolling out AI features aimed at speeding up workflows and cutting costs."Software companies with a strong AI element to them seem to be assets that investors want to buy," said Will Braeutigam, US capital markets transactions leader at Deloitte.Figma, for its part, has rolled out several products built around AI as it looks to stay competitive and meet growing demand for automation in design workflows."If this company didn't have an AI strategy, it would not be seeing this level of demand," Renaissance Capital's Kennedy said.Morgan Stanley, Goldman Sachs, Allen & Co and J.P. Morgan are the lead underwriters of the IPO.
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Economic Times
8 hours ago
- Economic Times
Figma IPO and stock reaction: All you need to know
Agencies Figma has become the latest major tech company to go public. On its first day of trading on the New York Stock Exchange, the stock surged 250%.The design software company and some of its existing investors sold 36.9 million shares at $33 each, beating the expected price range of $30-32. The price range had been raised from $25 to $28 earlier in the week due to strong demand. This IPO comes more than a year after Figma's planned $20 billion acquisition by Adobe was blocked by regulators, who said the deal could reduce competition in the market. Now trading under the ticker 'FIG', Figma's shares closed at $115.50 on Thursday (US time), giving it a market valuation of $67.7 billion. This is more than three times what Adobe had the Adobe deal, Danny Rimer, partner at Index Ventures and a member of Figma's board, wrote in a blog post: 'The world got to know Figma on a whole new level in 2022, when Adobe announced plans to acquire the company for $20 billion. That moment came with intense pressure and a spotlight few founders ever face.''Dylan remained his usual grounded, transparent self,' he wrote. Dylan Field is Figma's CEO and cofounder, and now holds a stake valued at over $6 billion.'When the deal fell through a year later, he didn't flinch. He turned the page and got right back to building,' Rimer public offering brought in $1.2 billion, though two-thirds will go to existing investors. Most of their shares are now subject to a lock-up period of 180 days, meaning all of the current value is just on paper, and the big stock sales can't happen until the quarter that ended in March, Figma's revenue rose by 46% to $228.2 million, while net income tripled to $44.9 million, according to a report by CNBC. Company profile Figma is best known for its cloud-based platform, which allows teams to collaborate on interface designs in real time, much like using Google Docs. But it has since expanded its services beyond design to include tools for website creation, AI programming, branded marketing, and digital in 2012 by Field and Evan Wallace, Figma has major global brands, including Netflix, Duolingo, Mercado Libre, Stripe, ServiceNow, and Pentagram Design, as its customers. Top Indian companies such as Zomato, Swiggy, Cred, and Groww also use the platform. Last November, Field told ET that the company is very interested in expanding its presence in India. He said around 85% of Figma's weekly active users are based outside the US, with a significant portion in India. 'There is a real revenue opportunity in India. It is a myth that you cannot monetise India,' Field had said. He added that the more time Figma spends in India, the better it will be at improving its services for the country's users. Elevate your knowledge and leadership skills at a cost cheaper than your daily tea. US tariff hike to hit Indian exports, may push RBI towards rate cuts Is Bajaj Finance facing its HDFC Bank moment? Tata Motors' INR38k crore Iveco buy: Factors that can make investors nervous Trump tariffs: End of road or a new journey ending Russia reliance? Stock Radar: PI Industries stock showing signs of momentum; takes support above 50-DEMA – time to buy? Long-term investing: Volatility, even threats, have limited shelf life; 5 large-caps from different sectors with upside potential of up to 38% These large- and mid-cap stocks can give more than 21% return in 1 year, according to analysts Weekly Top Picks: These stocks scored 10 on 10 on Stock Reports Plus
Time of India
8 hours ago
- Time of India
Figma IPO and stock reaction: All you need to know
Academy Empower your mind, elevate your skills Figma has become the latest major tech company to go public. On its first day of trading on the New York Stock Exchange , the stock surged 250%.The design software company and some of its existing investors sold 36.9 million shares at $33 each, beating the expected price range of $30-32. The price range had been raised from $25 to $28 earlier in the week due to strong IPO comes more than a year after Figma's planned $20 billion acquisition by Adobe was blocked by regulators, who said the deal could reduce competition in the trading under the ticker 'FIG', Figma's shares closed at $115.50 on Thursday (US time), giving it a market valuation of $67.7 billion. This is more than three times what Adobe had the Adobe deal, Danny Rimer, partner at Index Ventures and a member of Figma's board, wrote in a blog post: 'The world got to know Figma on a whole new level in 2022, when Adobe announced plans to acquire the company for $20 billion. That moment came with intense pressure and a spotlight few founders ever face.''Dylan remained his usual grounded, transparent self,' he wrote. Dylan Field is Figma's CEO and cofounder, and now holds a stake valued at over $6 billion.'When the deal fell through a year later, he didn't flinch. He turned the page and got right back to building,' Rimer public offering brought in $1.2 billion, though two-thirds will go to existing investors. Most of their shares are now subject to a lock-up period of 180 days, meaning all of the current value is just on paper, and the big stock sales can't happen until the quarter that ended in March, Figma's revenue rose by 46% to $228.2 million, while net income tripled to $44.9 million, according to a report by is best known for its cloud-based platform, which allows teams to collaborate on interface designs in real time, much like using Google Docs. But it has since expanded its services beyond design to include tools for website creation, AI programming, branded marketing, and digital in 2012 by Field and Evan Wallace, Figma has major global brands, including Netflix, Duolingo, Mercado Libre, Stripe, ServiceNow, and Pentagram Design, as its Indian companies such as Zomato Swiggy , Cred, and Groww also use the platform. Last November, Field told ET that the company is very interested in expanding its presence in India. He said around 85% of Figma's weekly active users are based outside the US, with a significant portion in India.'There is a real revenue opportunity in India. It is a myth that you cannot monetise India,' Field had said. He added that the more time Figma spends in India, the better it will be at improving its services for the country's users.
Mint
12 hours ago
- Mint
Figma stock rises 250% on $1.2 billion IPO debut, largest Day 1 pop in at least 30 years
Figma Inc.'s 250% surge in its debut session is the kind of coming-out party every startup dreams of when it goes public. The finely choreographed process for the $1.2 billion IPO, culminating in a fully diluted valuation of more than $65 billion, also puts rivals on notice that Figma's ambitions are expanding. The design and collaboration software company led by Dylan Field, who started the firm in 2012 with a friend from Brown University, soared above the $20 billion mark it would have fetched had a sale to Adobe Inc. not been scrapped in 2023. Shares of the San Francisco-based firm closed at $115.50 each on Thursday in New York, more than tripling the IPO price of $33 apiece. The trading gives Figma the largest first-day pop in at least three decades for a US-traded company raising more than $1 billion, data compiled by Bloomberg show. It also makes Field one of the world's richest people. Adobe's planned acquisition of Figma, which at the time would have been the biggest-ever takeover of a private software company, was panned by the Photoshop maker's shareholders, who sent its stock down nearly 17% the day the deal was announced. Today that deal looks like a bargain. Accounting for employee stock options and restricted stock units, including RSUs for Field, the company's fully diluted value is more than triple what Adobe had agreed to pay in cash and stock. Figma may never again be so cheap, and as it battles with Adobe and Australian startup Canva Inc. to dominate the use of artificial intelligence in creative tools, the company's soaring shares may open the door to some dealmaking of its own. Investors have handsomely rewarded Figma for its rapid growth, and the IPO's bankers made sure their enthusiasm wouldn't go unnoticed. Figma launched its listing on July 21 with its eye on a fully diluted valuation of as much as roughly $16 billion, well below the figure in the Adobe deal. That target was still positioned as a victory, coming after a tender offer last year valuing the design-focused company at $12.5 billion. Still, few market-watchers thought Field and his bankers from Morgan Stanley, Goldman Sachs Group Inc., Allen & Co. and JPMorgan Chase & Co. would stop there. The marketed range was raised on Monday to $30 to $32 a share from $25 to $28. The shares offered in Figma's IPO were ultimately more than 40 times oversubscribed, with more than half of the orders receiving no stock, Bloomberg News reported. The pacing almost perfectly mirrored Circle Internet Group Inc.'s debut in June, which similarly laddered its price and share count increases ahead of its 168% first-day pop. A key question for Figma's long-term success is whether it can become a tool used by office workers beyond designers. The company's suite of tools is seeing strong adoption by software developers, product managers, and marketers, said Andrew Reed, a partner at Sequoia Capital and a member of Figma's board. Sequoia, one of the most storied Silicon Valley venture firms, first invested in Figma in 2019. Around that time, companies were beginning to adopt Figma's product en masse, Reed said. Like many software firms, Figma charges clients based on the number of users and the kind of seat those users have. It added Dev Mode to the platform in 2023 to enable closer collaboration with developers, and has more recently incorporated AI technology into many of its own tools. This year it introduced Figma Make, an AI-based product that lets the user turn prompts into functional prototypes. The use of AI-focused software creation apps that are potential competitors to Figma, such as Lovable and Bolt, has rapidly increased this year. Weaving AI features into Figma's products is a top priority, Field said in an interview. 'We have so much room to explore how we can make great AI products and experiences.' Figma's financial metrics stand above most large-cap software companies, with growth north of 40%, a net-dollar retention rate of over 130% and high pricing power given the lack of a credible rival. - Anurag Rana and Andrew Girard, technology analysts Going public allows Figma to have a big brand moment which centers the importance of design, Field said. 'This is a time where we can create tremendous value for our community, our customers, and I think the public market is the right place to do it.' AI isn't the only fashionable technology Figma is embracing. The company's board approved a $55 million investment in a Bitcoin ETF run by Bitwise Inc. last year, and signed off in May on a $30 million investment in the cryptocurrency, its IPO filings show. The company bought 30 million of Circle's stablecoin USDC, valued at $1 each, and plans to reinvest the holdings into Bitcoin directly. Figma has also authorized the issuance of blockchain stock that could lead to selling blockchain-based tokens as a form of its shares, though it currently doesn't have specific plans to do so, according to the filings. Figma's bulldozing IPO campaign has produced a well-capitalized company whose stock can be currency in acquisitions — one of the potential uses detailed in Figma's IPO filings — and whose growing footprint in creative work could make it a fierce rival to the company that once tried to absorb it. The company mentioned just two acquisitions in its filings, the largest of which is a $35.5 million deal for Payload, an open source headless content management system. Field likely has bigger deals on his mind, based on the founder letter included in the IPO filing. In an interview with Bloomberg TV, Field reiterated the pledge he made in the IPO filing's founder letter that the company would pursue M&A at scale. 'There's so much out there which can be applicable to the company when you think of the breadth of product design and development,' he said. 'It has to be an amazing team, an amazing asset, and has to be something where we think the team is culturally consistent.' After its acquisition plans were thwarted, Adobe discontinued XD, its most direct Figma rival. Like many software companies, Adobe's current focus is adding AI features to its flagship creative products like Photoshop. Australia-based Canva's AI features are intended to speed the design process. In April, the company introduced a conversation-based AI tool, which responds to voice and text prompts to edit photos, generate slide decks and re-size designs. The soaring share price also puts into play the performance-based awards Field has, including a 10-year 'moon-shot' compensation package awarded just last month that begins to vest once the 60-day average stock price exceeds $60. The highest hurdle requires shares to top $130. Field's stake is worth $6.1 billion. He will continue to control the company with 74.1% of the voting power after the IPO through his holdings of Class B shares that have 15 votes each, the filings show. The company sold 12.47 million shares in the IPO, which priced Tuesday, while investors including Index Ventures, Greylock Partners and Kleiner Perkins sold 24.46 million shares. The shares were marketed for $30 to $32 per share, after the company increased the range earlier in the week. The company's stock trades on the New York Stock Exchange under the symbol FIG.
