Figma IPO: Is an Initial Public Offering on the Horizon After Adobe Deal Failure?

Sep 04, 2025

Figma IPO: Will the Design Giant Go Public After the Adobe Deal Fell Through?

The design world was rocked when Adobe's planned $20 billion acquisition of Figma collapsed under regulatory scrutiny. This has left many wondering: what's next for Figma? An Initial Public Offering (IPO) has emerged as a strong contender. This article delves into the possibility of a Figma IPO, examining its potential timing, valuation, challenges, and what investors should watch out for.

The Adobe Acquisition: A Brief Recap

In September 2022, Adobe announced its intention to acquire Figma, a collaborative design platform that had rapidly gained popularity among designers and businesses alike. The deal, valued at $20 billion, was met with both excitement and apprehension. While it promised to unite two major players in the creative software space, concerns were raised about potential monopolies and stifled innovation.

Regulatory bodies in the US, UK, and EU launched investigations into the acquisition, citing concerns that it would give Adobe an unfair advantage and reduce competition. Ultimately, these regulatory hurdles proved insurmountable, leading Adobe and Figma to mutually terminate the agreement in December 2023.

Why an IPO Makes Sense for Figma Now

With the Adobe deal off the table, Figma needs a new strategy to fuel its growth and provide liquidity to its investors and employees. An IPO presents several advantages:

Access to Capital: An IPO would provide Figma with a significant influx of capital that can be used to fund further product development, expand its market reach, and make strategic acquisitions.
Increased Brand Awareness: The IPO process itself generates substantial media coverage, raising Figma's profile and attracting new users.
Employee Motivation and Retention: Offering employees stock options and the opportunity to participate in the company's success can boost morale and reduce employee turnover.
Liquidity for Investors: An IPO provides early investors with a way to cash out their investments and realize a return on their capital.
Independence and Control: Remaining an independent company allows Figma to maintain its unique culture and strategic direction.

The Timing of a Potential Figma IPO

Predicting the exact timing of an IPO is always challenging, as it depends on various factors, including market conditions, the company's financial performance, and regulatory considerations. However, we can analyze some key indicators to estimate a potential timeframe:

Market Conditions: The IPO market has been volatile in recent years, with periods of strong activity followed by downturns. Figma is likely to wait for a more favorable market environment before going public. Factors to watch include interest rates, inflation, and overall economic growth.
Financial Performance: Figma needs to demonstrate strong revenue growth, profitability (or a clear path to profitability), and a solid financial foundation to attract investors. The company will likely spend the next few quarters focusing on improving its financial metrics.
Regulatory Scrutiny: Given the scrutiny surrounding the Adobe acquisition, Figma can anticipate regulatory oversight as it prepares for an IPO. The company will need to ensure its business practices comply with antitrust laws and other regulations.

Based on these factors, a Figma IPO is unlikely to occur in the immediate future. A more realistic timeframe would be late 2024 or 2025, depending on how quickly the company can address the challenges and capitalize on opportunities.

Valuation of Figma: What Could the Company Be Worth?

Determining Figma's potential valuation is complex. The terminated Adobe deal valued the company at $20 billion. However, market conditions have shifted significantly since then, impacting valuations across the tech sector.

Several factors will influence Figma's IPO valuation:

Revenue Growth: Figma's revenue growth rate is a key indicator of its potential. Investors will look for consistent, double-digit growth to justify a high valuation.
Profitability: While many tech companies prioritize growth over profitability in their early stages, investors are increasingly demanding a clear path to profitability. Figma's ability to demonstrate its long-term earning potential will be crucial.
Market Position: Figma's dominant position in the collaborative design software market is a significant asset. Its large and growing user base provides a strong foundation for future growth.
Comparable Companies: Analyzing the valuations of publicly traded companies in similar industries can provide a benchmark for Figma's potential valuation. Companies like Atlassian and Zoom offer relevant comparisons.
Market Sentiment: Overall investor sentiment towards tech stocks and IPOs will play a significant role in Figma's valuation.

Given the current market climate, it's plausible that Figma's IPO valuation could be lower than the $20 billion initially offered by Adobe. A more conservative estimate might range from $10 billion to $15 billion, although a successful IPO could push the valuation higher.

Challenges and Risks Facing Figma

While an IPO presents a significant opportunity for Figma, the company also faces several challenges and risks:

Competition: The design software market is competitive, with established players like Adobe and emerging startups vying for market share. Figma needs to continue innovating and differentiating itself to maintain its leadership position.
Economic Downturn: A global economic downturn could negatively impact Figma's growth prospects, as businesses may cut back on software spending.
Data Security and Privacy: As a cloud-based platform, Figma is vulnerable to data breaches and privacy concerns. The company needs to invest heavily in security measures to protect user data.
Integration with Other Tools: Figma needs to ensure its platform integrates seamlessly with other tools and workflows used by designers and businesses.
Maintaining its Culture: As Figma grows, it needs to preserve its unique culture and maintain its focus on user experience.

Potential Investors: Who Might Be Interested in Figma Stock?

A Figma IPO is likely to attract a wide range of investors, including:

Venture Capital Funds: Many venture capital firms that have previously invested in Figma are likely to participate in the IPO.
Institutional Investors: Mutual funds, pension funds, and hedge funds are always looking for promising growth stocks.
Retail Investors: Individual investors who are familiar with Figma's platform and believe in its long-term potential may be interested in buying shares.
Strategic Investors: Companies in related industries might see value in acquiring a stake in Figma.

Figma's Competitive Landscape: Who Are the Key Players?

Understanding Figma's competitive landscape is crucial for assessing its future prospects. Key competitors include:

Adobe: Despite the failed acquisition, Adobe remains a major player in the design software market with its suite of products, including Photoshop, Illustrator, and XD.
Sketch: Sketch is a popular vector-based design tool that is particularly popular among UI designers.
InVision: InVision offers a range of design collaboration and prototyping tools.
Canva: Canva is a user-friendly design platform that is popular among non-designers.
Affinity Designer: Affinity Designer is a professional-grade vector graphics editor that offers a cost-effective alternative to Adobe Illustrator.

Figma differentiates itself from its competitors through its collaborative features, cloud-based platform, and focus on user experience. Its real-time collaboration capabilities have made it a favorite among design teams working remotely or across different locations. Figma's web-based architecture also eliminates the need for users to download and install software, making it more accessible and convenient.

Key Metrics to Watch Before a Figma IPO

Before investing in a Figma IPO, investors should carefully examine several key metrics:

Revenue Growth: Track Figma's revenue growth rate to assess its market traction and potential for future expansion.
User Growth: Monitor the growth of Figma's user base to gauge its popularity and adoption rate. Pay attention to both the number of registered users and the number of active users.
Customer Retention: Assess Figma's ability to retain existing customers, as this is a key indicator of customer satisfaction and long-term growth potential.
Gross Margin: Analyze Figma's gross margin to determine its profitability on each dollar of revenue. A higher gross margin indicates greater efficiency and pricing power.
Operating Expenses: Evaluate Figma's operating expenses to understand its cost structure and how efficiently it manages its resources.
Cash Flow: Monitor Figma's cash flow to ensure it has sufficient funds to finance its operations and growth initiatives.
Net Promoter Score (NPS): NPS measures customer loyalty and satisfaction. A high NPS indicates that customers are likely to recommend Figma to others.

The Role of the CEO and Leadership Team

Figma's CEO, Dylan Field, and his leadership team will play a crucial role in guiding the company through the IPO process and beyond. Investors will closely scrutinize their experience, vision, and ability to execute on their strategic plans.

Dylan Field co-founded Figma in 2012 and has served as its CEO since then. He is widely regarded as a visionary leader with a deep understanding of the design software market. His ability to articulate Figma's mission, inspire employees, and attract investors will be essential for a successful IPO.

The leadership team's track record in managing growth, navigating competitive challenges, and building a strong company culture will also be critical factors. Investors will want to see a team that is capable of leading Figma through its next phase of development as a publicly traded company.

What an IPO Means for Figma Users

A Figma IPO could have several implications for its users:

Continued Innovation: With access to more capital, Figma can invest more heavily in product development and innovation, potentially leading to new features and improvements to the platform.
Stability and Reliability: As a publicly traded company, Figma will be subject to greater scrutiny and accountability, which could lead to increased stability and reliability of its services.
Potential Changes in Pricing: While unlikely in the short term, an IPO could eventually lead to changes in Figma's pricing structure. However, the company will need to carefully consider the impact of any pricing changes on its user base.
Enhanced Support and Resources: With more resources at its disposal, Figma could improve its customer support and provide more educational resources to its users.

The Future of Design Software: Figma's Place in the Market

The design software market is constantly evolving, driven by technological advancements and changing user needs. Figma is well-positioned to capitalize on several key trends:

Collaboration: The increasing emphasis on remote work and distributed teams is driving demand for collaborative design tools like Figma.
Cloud-Based Solutions: Cloud-based platforms offer greater flexibility and accessibility compared to traditional desktop software.
User Experience (UX): The growing importance of UX design is driving demand for tools that help designers create intuitive and engaging user experiences.
Design Systems: The adoption of design systems is helping organizations streamline their design processes and maintain consistency across their products.
Artificial Intelligence (AI): AI is increasingly being used to automate design tasks and provide designers with new creative possibilities.

Figma's focus on collaboration, cloud-based solutions, and user experience makes it a leader in the design software market. As the market continues to evolve, Figma is likely to play an increasingly important role in shaping the future of design.

Potential Acquisition Targets for Figma Post-IPO

After a successful IPO, Figma could use its newfound capital to make strategic acquisitions that complement its existing product offerings and expand its market reach. Potential acquisition targets could include:

Companies specializing in UI/UX testing and analytics: Acquiring a company in this space would allow Figma to provide its users with more comprehensive tools for evaluating the effectiveness of their designs.
Companies offering design system management solutions: Integrating a design system management solution into Figma would help organizations streamline their design processes and maintain consistency across their products.
Companies developing AI-powered design tools: Acquiring a company specializing in AI could help Figma automate design tasks and provide its users with new creative possibilities.
Companies focused on specific design verticals: Acquiring a company focused on a specific design vertical, such as web design or mobile app design, could help Figma expand its market reach and cater to the needs of specialized users.

The IPO Process: A Step-by-Step Guide

The IPO process is a complex undertaking that involves several key steps:

Selecting an Investment Bank: Figma will need to choose an investment bank to underwrite the IPO and manage the offering process.
Due Diligence: The investment bank will conduct thorough due diligence to assess Figma's financial performance, business operations, and legal compliance.
Drafting the S-1 Registration Statement: Figma will need to file a registration statement (S-1) with the Securities and Exchange Commission (SEC), which provides detailed information about the company and its business.
Roadshow: Figma's management team will conduct a roadshow to present the company to potential investors and generate interest in the IPO.
Pricing the IPO: The investment bank will work with Figma to determine the offering price for the shares.
Going Public: Once the SEC approves the registration statement, Figma will begin trading its shares on a public stock exchange.

Conclusion: Figma's Future as an Independent Company

The collapse of the Adobe acquisition has opened a new chapter for Figma. An IPO appears to be a logical next step, offering the company a path to continued growth, increased brand awareness, and liquidity for its investors and employees. While challenges and risks remain, Figma's strong market position, innovative platform, and talented leadership team position it well for a successful future as an independent company.

Investors should closely monitor Figma's financial performance, competitive landscape, and market conditions to assess the potential of a future IPO. The design world will be watching with great interest to see how Figma navigates this exciting new phase of its journey.