Figma moves closer to a blockbuster IPO that could raise $1.5B

Figma has taken a significant step toward a potential initial public offering (IPO) by releasing its financial statements. The design software firm’s initial S-1 filing, while lacking specifics like the number of shares to be offered and their pricing, provides an insightful glimpse into its financial condition and future prospects. According to IPO analysts at Renaissance Capital, Figma could secure as much as $1.5 billion from this IPO, a figure that, if achieved, would rival the $1.5 billion raised by CoreWeave, marking it as one of the largest tech IPOs of 2025 to date. The company’s financial performance is noteworthy; it reported revenues of $749 million for 2024, representing a remarkable 48% increase from the previous year. This upward trend continued into the first quarter of 2025, where Figma experienced a 46% year-over-year revenue growth. Figma’s rolling 12-month revenues reached $821 million, showcasing an impressive 91% gross margin. However, the company faced a significant loss of $732 million in 2023, attributed mainly to one-time expenses linked to a major stock compensation event for employees. Despite this, Figma returned to profitability by the fourth quarter of 2024 and maintained that momentum into the first quarter of 2025. Interestingly, Figma claims to have negligible debt, stating that it has none, although it does maintain a revolving credit line. There's also uncertainty regarding whether any executives or venture capitalists will sell shares during the IPO. Notably, major investors include Index, Greylock, Kleiner Perkins, and Sequoia. In 2024, several executives participated in a significant tender offer, allowing them to liquidate shares, with CEO Dylan Field cashing out $20 million worth. The S-1 filing also revealed a unique situation regarding co-founder Evan Wallace, who departed from the company in 2021. Although he remains officially recognized as a co-founder, he has transferred full voting rights and control over his shares to Field. Wallace’s family trust retains approximately one-third of the super-voting Class B shares, giving Field control over about 75% of the voting rights pre-IPO. Despite the strong financials that generally attract investors, Figma faces competition from emerging AI-driven design platforms like Lovable. The company has acknowledged the fierce competition in the AI landscape, emphasizing its commitment to integrating AI technologies into its services. However, it also recognizes the risks of staying competitive as AI technology continues to evolve rapidly, stating in its S-1 that there is no guarantee that its offerings will remain at the forefront of this dynamic industry.