Figma has filed for an IPO and plans to expand

Collaborative design software company Figma has filed with the U.S. Securities and Exchange Commission (SEC) for an initial public offering (IPO) on the New York Stock Exchange under the ticker FIG, CNBC reports.

The offering is set to be one of the most anticipated IPOs in recent years, given Figma's rapid growth and high private market valuation. In late 2023, Adobe's plans to acquire Figma for $20 billion were scrapped due to concerns from the British antitrust regulator, forcing Adobe to pay Figma $1 billion in compensation for the aborted deal.

As part of its IPO filing, Figma disclosed its financial results, which show that the company's revenue in the first quarter increased by 46% to $228.2 million compared to $156.2 million a year earlier. Net income for the period was $44.9 million compared to $13.5 million in the first quarter of 2024.

As of March 31, Figma served about 450,000 customers, including more than 1,000 paying companies at least $100,000 per year — a 47% increase from a year earlier. Customers include Duolingo, Mercado Libre, Netflix, Pentagram, ServiceNow, and Stripe. ServiceNow CEO Bill McDermott has joined Figma’s board of directors.

Figma, founded in 2012 by CEOs Dylan Field and Evan Wallace, pioneered collaborative design in the browser. Field, the largest shareholder with 56.6 million Class B shares and 51% of the voting power, said in a letter to investors that the IPO would strengthen the company's "brand, liquidity, financials and access to capital markets" and allow the broader Figma community to become co-owners.

The company was valued at $12.5 billion in a tender offer last year. Wall Street analysts believe that Figma’s IPO could be another stimulus for the recovery of activity in the technology listing market after the downturn that began in late 2021. Competitors Circle and Chime successfully debuted on the stock exchange in June, and Hinge Health’s IPO took place in May.

Among Figma's major investors before the IPO were venture capital funds Index Ventures (17%), Greylock (16%), Kleiner Perkins (14%), and Sequoia (8.7%).

In the prospectus, Figma noted "fierce competition" and risks of losing market share, without naming specific rivals.

Over 13 million people use Figma every month, but only a third of them are designers. About 85% of monthly users are outside the US, but 53% of revenue is generated in America.

In March, the company introduced Figma Sites, a service that turns mockups into finished websites. It's one of the products that diversifies Figma's business beyond its core collaborative design tool.

As of the end of March, Figma had $1.54 billion in cash, cash equivalents, and marketable securities on its balance sheet.

In a letter to investors, Field said that as a public company, Figma “plans to make big bets,” including through acquisitions. In April, the company spent $14 million to acquire the assets of a technology firm and $35.5 million on a content management system startup. In June, Figma acquired Payload, a CMS startup backed by Google and MongoDB, as well as Modyfi.