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Figma's $20 Billion Sale Died. It Came Back to Go Public.

Figma Sets Sights on IPO Amid Tech Sector Revival, Valued at Potential $20 Billion

SAN FRANCISCO — In a move that underscores the resurgence of initial public offerings in the technology sector, Figma, the collaborative design software company, has filed confidential paperwork with the Securities and Exchange Commission to go public, according to sources familiar with the matter. The filing, expected to become public in the coming months, positions Figma for a potential debut on the Nasdaq stock exchange as early as late 2025, marking one of the most anticipated tech IPOs since the market downturn of 2022-2023.

Figma's journey to this point has been nothing short of dramatic. Founded in 2012 by Dylan Field and Evan Wallace, two Brown University graduates with a vision to democratize design tools, the company quickly gained traction among designers, product managers, and developers for its cloud-based platform that allows real-time collaboration on user interface and experience projects. Unlike traditional software like Adobe's suite, which requires hefty installations and licenses, Figma operates entirely in the browser, fostering a seamless, multiplayer editing experience akin to Google Docs for design.

The company's rise was meteoric. By 2020, Figma had amassed millions of users, including major corporations like Microsoft, Uber, and The New York Times. Its freemium model — free for basic use, with paid tiers for advanced features — helped it penetrate startups and enterprises alike. Revenue surged from $75 million in 2020 to over $400 million by 2023, driven by the pandemic-fueled shift to remote work, where tools enabling virtual collaboration became indispensable.

But Figma's path to independence was fraught with high-stakes drama. In September 2022, Adobe announced a staggering $20 billion acquisition deal, the largest in software history at the time. The merger was pitched as a way to integrate Figma's innovative tools into Adobe's ecosystem, potentially supercharging creative workflows. However, antitrust regulators in the United States, European Union, and United Kingdom raised alarms, arguing that the deal would stifle competition in the digital design market. After prolonged scrutiny, including a lawsuit from the U.S. Department of Justice, Adobe abandoned the acquisition in December 2023, paying Figma a $1 billion termination fee. This windfall not only bolstered Figma's coffers but also affirmed its standalone value.

Post-breakup, Figma has thrived. Under CEO Dylan Field, who remains at the helm, the company has expanded its product lineup. In 2024, it launched FigJam, an AI-powered whiteboarding tool, and Dev Mode, which bridges the gap between designers and developers by allowing code previews directly in the platform. These innovations have helped Figma capture a larger share of the $10 billion-plus design software market. Analysts estimate that Figma now commands about 30% of the collaborative design segment, outpacing rivals like Sketch, InVision, and even Adobe's XD, which has struggled to keep pace.

The decision to pursue an IPO comes at a pivotal moment for the tech industry. After a barren period in 2022-2023, when high interest rates and economic uncertainty halted many listings, the market has rebounded. Successful debuts by companies like Reddit and Astera Labs in 2024 have paved the way, with investors showing renewed appetite for high-growth tech firms. Figma's filing is seen as a bellwether; if successful, it could encourage other unicorns, such as Stripe or Databricks, to follow suit.

Sources close to the company indicate that Figma is targeting a valuation of around $20 billion, roughly matching the Adobe offer. This would be based on a multiple of its annualized recurring revenue, which hit $600 million in early 2025, up 50% from the previous year. The company's profitability metrics are also improving: while it reported losses in its early years due to heavy investments in R&D and marketing, Figma achieved net profitability in Q2 2025, with margins approaching 20%. This financial health is a key selling point in a post-ZIRP (zero interest rate policy) era, where investors prioritize sustainable growth over speculative hype.

Industry experts are optimistic but cautious. "Figma has built a moat through its community and ecosystem," said Sarah Tavel, a partner at Benchmark, one of Figma's early investors. "It's not just a tool; it's a platform where plugins and integrations create network effects. But the IPO will test whether it can maintain momentum against giants like Adobe, who might retaliate with aggressive pricing or new features." Indeed, Adobe has ramped up its efforts, announcing AI enhancements to Illustrator and Photoshop that directly compete with Figma's offerings.

Figma's user base, now exceeding 10 million active users worldwide, is a testament to its appeal. Freelance designers praise its accessibility, while enterprise clients value its security features and scalability. A recent survey by Gartner highlighted Figma as the top-rated design tool for collaboration, scoring higher than competitors in user satisfaction. The company's commitment to inclusivity — including free access for students and nonprofits — has also built goodwill, contrasting with Adobe's more corporate image.

Looking ahead, Figma's prospectus is expected to outline ambitious plans. Insiders reveal intentions to invest heavily in artificial intelligence, with features like auto-generated prototypes and smart asset libraries on the horizon. Expansion into adjacent markets, such as 3D design and augmented reality tools, could further diversify revenue streams. Geographically, while the U.S. accounts for 60% of its business, Figma is eyeing growth in Asia and Europe, where digital transformation is accelerating.

However, challenges loom. The broader economic landscape remains volatile, with inflation concerns and geopolitical tensions potentially dampening investor enthusiasm. Regulatory scrutiny hasn't entirely abated; Figma must navigate data privacy laws like GDPR and emerging AI regulations. Competition is intensifying: Canva, the Australian upstart valued at $26 billion, has been encroaching with its user-friendly design tools aimed at non-professionals, while startups like Penpot offer open-source alternatives.

Field, in a recent interview with The New York Times, expressed confidence. "We've always been about empowering creators, and going public is the next step in that mission," he said. "The Adobe saga taught us resilience, and we're excited to bring more people into our story as shareholders." Field, who owns a significant stake, stands to become one of tech's newest billionaires if the IPO succeeds.

Wall Street's reception will be telling. Bankers from Morgan Stanley and Goldman Sachs, leading the offering, are pitching Figma as a "generational company" akin to Salesforce or Zoom — tools that redefined their categories. Early roadshow feedback suggests strong interest from institutional investors, particularly those focused on SaaS (software as a service) models.

For the design community, Figma's IPO represents more than financials; it's a validation of collaborative innovation in a field long dominated by incumbents. As one designer put it on Figma's community forum: "This isn't just about stock prices; it's about the future of how we create." If the listing goes as planned, Figma could not only enrich its founders and employees but also inspire a new wave of tech entrepreneurship.

In the end, Figma's story is one of perseverance. From a bootstrapped startup to a near-acquisition casualty, and now to IPO contender, it embodies the highs and lows of Silicon Valley. As the company prepares to ring the opening bell, the tech world watches closely, hoping for a blockbuster that signals brighter days ahead.

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Read the Full The New York Times Article at:
[ https://www.nytimes.com/2025/07/31/technology/figma-ipo.html ]