Above all expectations: How Figma’s IPO exceeded dreams.

Written by Yann Grutzmacher

From 33 dollars a share to over 120 in just two trading days, Figma’s Wall Street debut defied expectations and reignited tech IPO fever. The question now is whether the design software giant can turn this explosive market entry into lasting value, or if it will join the ranks of overhyped listings that fade once the hype wears off.

Figma (Ticker: FIG) officially went public on July 31st, 2025. The company priced its IPO at 33 dollars per share, issuing approximately 12.5 million new shares, while another 24.5 million shares were sold by existing shareholders. including early employees, venture capital funds, and founders. This structure allowed insiders to realise part of their investment without diluting the company’s existing capital base too heavily. While common in modern tech IPOs, it also meant that most of the proceeds went to private sellers, not toward funding Figma’s growth. The IPO raised about 412.5 million dollars for Figma directly, while the total value of shares sold to the public reached 1.221 billion dollars.

When trading began on July 31st, 2025, Figma shares opened at 85 dollars, a 157 percent premium over the IPO price. This surge was driven by an acute supply-demand imbalance. With only about 7.5 percent of total shares available to the public and demand exceeding supply by more than 30 times, competition for shares was intense. Investment banks allocated most of the IPO shares at 33 dollars to large institutional clients, leaving retail investors with only small allocations. As a result, those wanting significant exposure had to buy in the open market, where bidding pressure during the NYSE opening auction pushed the price sharply higher. This, combined with Figma’s strong growth story and recent independence from Adobe, created one of the most dramatic first day jumps of the decade.

Why price the shares at 33 dollars?

According to internal statements and third-party sources, Figma and its advisors applied a methodology grounded in industry comparables and fundamental analysis. With 257 million dollars in revenue in 2024 and 48 percent year-on-year growth, the IPO price implied a 75.1x revenue multiple. This fits within the higher end of software IPO valuations, but well below the 219.2x revenue multiple that the stock reached by the end of its first trading day.

Figma took a restrained approach. Analysts say the IPO was oversubscribed by more than 30 times, and platforms like Robinhood only distributed 1 to 3 shares per user. As a result, demand far outpaced available supply and the stock value skyrocketed.

How banks and early investors benefited

Investment banks including Goldman Sachs, Morgan Stanley and Allen & Co acted as lead underwriters. These institutions distributed most shares at the IPO price to institutional clients. These clients, including hedge funds and asset managers, immediately saw returns of over 150 percent by the time the stock opened at 85 dollars.

Some banks may have engaged in structured secondary sales prior to public trading, a legal but controversial practice that allows preferred clients to lock in profits before retail investors even get access. In these arrangements, investors who received IPO allocations at 33 dollars could prearrange to sell part of their shares to another institution at a higher price, such as 50 or 60 dollars, before the stock began trading on the exchange. This meant they could secure substantial gains without market risk, while the secondary buyer could still profit if the stock opened higher, as it did at 85 dollars.

What happened after the IPO?

From 33 dollars at IPO to a peak of 124.63 dollars on August 2nd, the stock posted a gain of 277.7 percent. Even from its opening trade of 85 dollars, it climbed another 46.6 percent in just two days. By August 5th, the price had corrected to around 80 dollars, and a market cap of around 39 billion.

Source: Koyfin

Figma’s valuation, even after correcting to an approximate 19x P/S multiple, remains astronomically high compared to peers:

• Adobe trades around 6.5x

• Atlassian is close to 8.4x

• Snowflake sits at approximately 16.6x

Figma’s valuation significantly exceeds that of more mature and already profitable peers. This raises the question: is this enthusiasm justified?

What do the financials say?

Figma generated 257 million dollars in revenue in 2024 and projects 280 million dollars in ARR by Q2 2025, where ARR, or annual recurring revenue, represents the total value of all ongoing subscription contracts projected over a year and is a key metric for assessing predictable, subscription-based income in software companies. Figma was not profitable in 2024, posting a net loss of approximately 732 million dollars. This figure was heavily affected by a one-time 889 million dollar stock-based compensation expense related to the terminated Adobe acquisition. Excluding this extraordinary item, the company recorded an operating loss of 72 million dollars, mainly due to ongoing R&D investments and AI product development. Figma’s gross margin remains strong at 88 percent, a level typical for leading SaaS businesses, and it achieved its first profitable quarter in Q1 2025 with a net income of 44.9 million dollars. However, without consistent free cash flow or sustained operating profits, it is challenging to justify a valuation in the 40 to 60 billion dollar range purely on current fundamentals.

What supports investor confidence is the stickiness of the platform. Over 95 percent of Fortune 500 companies reportedly use Figma’s tools in their workflow. The company has become essential infrastructure in the design and product collaboration space.

The Adobe acquisition that never happened

Back in September 2022, Adobe announced a plan to acquire Figma for 20 billion dollars in cash and stock. At the time, Figma was a rising challenger to Adobe XD, and the acquisition was seen as both a strategic expansion and a defensive move.

However, global regulators pushed back. The US Federal Trade Commission, the UK’s Competition and Markets Authority, and the EU raised concerns about market concentration in creative and collaboration software. Adobe and Figma called off the deal on December 18th 2023, and Adobe paid a 1-billion-dollar breakup fee to Figma, a contractual payment intended to compensate the target company for the time, resources, and opportunity cost of a failed transaction.

Many investors saw this failed acquisition as a win for innovation. By staying independent, Figma retained its identity and product focus. The IPO was perceived as a second victory over Adobe, proof that Figma could thrive on its own and even far surpass the valuation Adobe was willing to pay.

A modern case study in IPO pricing and market behavior

Figma’s IPO shows how even a carefully priced and structurally conservative offering can turn explosive when supply is restricted and narrative takes over.

The valuation leap from 19.3 billion to over 47 billion dollars in just hours was not driven by fundamentals but by artificial scarcity and overwhelming demand. While this rewarded early shareholders and IPO clients, it raised concerns about fairness in capital markets, as the real winners are the institutional investors.

Still, the excitement is not unfounded. Figma sits at the heart of modern collaboration and software development workflows. It is an indispensable tool for millions of users. If the company sustains its revenue growth and can pivot toward profitability, the valuation may eventually catch up with reality.

Until then, FIG will remain under the microscope as the poster child for the post-Adobe, post-hype, high-demand IPO era.