Figma files for IPO on NYSE, plans to 'take big swings' with acquisitions

Figma, the innovative design software firm, has officially filed for an initial public offering (IPO) and aims to trade on the New York Stock Exchange under the symbol "FIG." This IPO is generating considerable buzz, reflecting Figma's impressive growth trajectory and substantial private market valuation. In late 2023, a proposed $20 billion acquisition deal with Adobe fell through due to regulatory hurdles in the UK, resulting in Adobe paying Figma a hefty $1 billion termination fee. According to Figma's prospectus, the company reported a remarkable 46% increase in revenue for the first quarter, reaching $228.2 million, up from $156.2 million year-over-year. Additionally, Figma's net income surged to $44.9 million, a significant rise from $13.5 million in the previous year, showcasing its strong financial performance. As of March 31, Figma has amassed approximately 450,000 customers, with over 1,000 contributing at least $100,000 annually—a 47% increase compared to the previous year. Notable clients include industry giants like Duolingo, Netflix, and Stripe. Moreover, Bill McDermott, the CEO of ServiceNow, has joined Figma's board, bringing valuable experience from his roles at both ServiceNow and Zoom. While Figma has yet to disclose the number of shares it plans to offer in its IPO, the company was valued at $12.5 billion during a tender offer last year. Following a confidential filing with the SEC in April, the market has been buzzing with activity, particularly after a period of stagnation due to rising inflation and interest rates. Following the 2024 U.S. presidential election, the IPO landscape quickly shifted. Companies like online banking firm Chime and design software startup Modyfi have made their market debuts. Figma, founded in 2012 by CEO Dylan Field and Evan Wallace, employs around 1,646 people as of March 31. Field, who has a significant stake in the company, expressed his desire to take Figma public to share ownership with its community and enhance corporate visibility. Figma acknowledges the fierce competition it faces and how losing market share could impact its business. Interestingly, only one-third of its 13 million monthly users are designers, with the majority located outside the U.S., contributing significantly to revenue. Recently, Figma launched Figma Sites to diversify its offerings beyond collaborative design tools. As of the end of March, Figma held $1.54 billion in cash and marketable securities. Field highlighted that as a public entity, Figma intends to pursue bold acquisitions, having already invested in several companies this year. Furthermore, Figma is expanding its investment portfolio to include digital currencies, such as Bitcoin and stablecoins, reflecting its innovative spirit. The IPO marks a significant milestone not only for Figma but also for Silicon Valley investors eager for returns after a prolonged downturn in the market. Morgan Stanley and Goldman Sachs are leading the underwriting process, indicating strong confidence in Figma's future.