Figma's IPO : What to Know

So, let’s talk about the Figma IPO

The Figma IPO just went live a few days ago on July 31st, 2025. The collaborative design pool declared their fixed price of a share just above their expected price range ($28 - $32) at $33.60. When the IPO went live, mostly everyone who had bought into the IPO pre-order had just received one share, myself included. The statistic that was talked about the most was that Figmo’s IPO was 40x oversubscribed meaning more than half of the original investors in the IPO didn’t receive a share. After trading went live across all stock exchange, the stock rose up to hit $148 within the first few hours of trading going live, however after the market closed on the first day, the stock dipped back down in the early hours before the market opened to ~$122. Now, the stock has leveled out trading in the $110 to $120 range, mostly in the lower $110 range. Now, let’s answer the question, should Figma be bought right now for and is it going to have strong, aggressive growth, or do we have another Circle IPO situation on our hands. Before we answer that question, let’s take a look into some background and context related to Figma and its IPO.

Figma Background

Figma was founded in 2012 by Dylan Field and Evan Wallace, two CS students and friends at Brown at the time. They both had experience in product design and software engineering through their internships which they wanted to bring to a product. At the core, Figma was developed to be a collaborative design editor where users can design, edit, and create designs in real time on a web browser. Since 2012, Figma took huge leaps in design, prototyping, and design systems ultimately letting them hit revenue milestones in 2018, 2019, 2020 marked at $4 million, $15 million, $40 million, respectively. Till 2020, Figma was moving in the right direction making great leaps, however 2021 was the year that changed everything for them. Figma released FigJam, an online, real-time collaboration virtual workspace where teams or companies could work on ideation, task processing, etc. That year, they hit $95 million dollars in revenue and $9 billion in valuation (Series E). In 2022, Adobe and Figma announced their deal for Figma to be bought by Adobe for $20 billion. However, the deal fell through as Adobe and Figma mutually let go of the deal because the European Commission and UK Competition and Markets Authority would not allow the necessary regulatory approval for the deal. Their reasoning to block the deal was Adobe’s acquisition of Figma might create a monopoly in the industry for design and creative software and would ultimately reduce competition in global markets. Due to that deal falling through, Adobe had to pay Figma a $1 billion termination fee. However, that drove Figma to keep growing their products making them hit a valuation of $12.5 billion in 2024. In April of 2025, they decided to file for an IPO and in May of 2025, they announced the release of their own AI-powered products causing their revenue to boom and their IPO to be one of the biggest of the year.

Math Behind It

Now, knowing the background on Figma and how it came to the point it is at today, let’s use the numbers to see if it is really worth investing in Figma right now (non-IPO price) and see where its direction is headed.

FY2024 gave Figma a revenue of approximately $749 million, with it running a reported 46% YoY growth, implying a projected revenue of $749M x 1.46 = $1.09B.

The market cap of FIG at the current share price (~$122) is around $59B.

$59B/1.09B = 54× (revenue multiple)

The calculation above takes the market cap and divides it by our projected FY2025 revenue, and that gives us the revenue multiple. The revenue multiple is a metric to show how much the market is willing to pay for each dollar of the company’s revenue. In simpler terms, higher revenue multiples mean investors are more willing to pay more currently for each dollar the company makes in revenue as they foresee or expect strong growth, customer retention, and defense to competition, while lower multiples mean the market sees slower growth, meaning the company might be more mature or stable already.

Let’s consider a different scenario where the market re-adjusts or re-rates FIG to a more sustainable 25x revenue multiple. In that scenario, we would have $59B/25 = $2.36B in revenue.

From here, we can find the Compound Annual Growth Rate (CAGR) for around the next 2 years.

$$\left(\frac{2.36}{1.093}\right)^{1/2} - 1 \approx 0.47 \quad\text{or}\quad 47\% \text{ annual growth}$$

Sustaining a CAGR in that range of 45% to 50% is a very aggressive expectation especially with companies that already have $1B on base. The leading high quality SaaS in the industry today such as Datadog, Snowflake, ServiceNow, Atlassian, etc. have all been at that stage where it boomed post IPO for a short period, but now trade at a revenue multiple around 15x - 30x, a sustainable, moderate growth pattern with growing returns.

Below is a table and chart with revenue needed to justify a $59B valuation at different multiples and the CAGR required

$$\begin{array}{|c|c|c|} \hline \text{Revenue Multiple} & \text{Required Revenue (B)} & \text{CAGR over 2 Years} \\ \hline 15\times & 3.93 & \left(\frac{3.93}{1.093}\right)^{1/2}-1 \approx 89.7\% \\ \hline 20\times & 2.95 & \left(\frac{2.95}{1.093}\right)^{1/2}-1 \approx 64.3\% \\ \hline 25\times & 2.36 & \left(\frac{2.36}{1.093}\right)^{1/2}-1 \approx 47.0\% \\ \hline 30\times & 1.97 & \left(\frac{1.97}{1.093}\right)^{1/2}-1 \approx 34.1\% \\ \hline 50\times & 1.18 & \left(\frac{1.18}{1.093}\right)^{1/2}-1 \approx 3.9\% \\ \hline \end{array}$$

Summary

As a product, FIG is a very high quality platform with numerous features and initiatives that has put itself in the position that it is in today. It’s capability in serving as a real-time collaboration design tool that has taken huge leaps in its packages, products, and AI development has made itself a tool that 90+% of Fortune 500 companies use. However, the current valuation and revenue multiple of 54x has a near perfect execution and growth expectation. This gap between this revenue multiple and the conservative range of revenue multiples is very wide creating asymmetry there. From all the analysis, we have made, let’s come to a conclusion now where I think your answer depends on your investing goal.

• Bullish Road

  • If you believe that FIG can grow ~45% - 50% annually over the next 2+ years and either (a) FIG will hold that high revenue multiple or (b) you are comfortable and have the means to sit through volatility until the thesis plays our not, then you can hold a moderate position and

    buy right now.

  • High Risk, High Reward

  • Volatility

  • Huge downside if the share prices slip

• Bearish Road

  • If your goal is to see moderate growth and have a defensive standpoint, I think (a) wait for a pullback in the revenue multiple to drop in that 15x - 30x range or (b) wait for clearer evidence and statistics of sustained higher growth

  • Less Risk, Less Reward

  • Moderate Growth

• Personal Belief: From a personal standpoint, I do believe that the FIG does have a lot of real potential and ‘hype’ to it, however to an extent, it was blown out of proportion due to the recent Circle IPO that started around the same price range of ~$30 and blew up to a 4-week high of ~$290. Since that IPO, I think the original blow in price has gotten out of the way, and I think the current trading value is what FIG will trade at for the next month or so minimum. Buying the stock right now at its current trading price without any trading history is risky in my opinion, and you would have to be very bullish on it to invest right now (be able to invest on the 50x revenue multiple and stick through volatility). If you are thinking about buying, see where the stock goes from here and to stay on the safer side, you should WAIT for a pullback in revenue multiple or be more certain that there will be sustained growth.