SAN FRANCISCO, CA – Design software company Figma has confidentially filed for an initial public offering, charting a new course toward the public markets after its planned $20 billion acquisition by Adobe was terminated late last year.

• New Strategic Path – Figma is pursuing an IPO after its $20 billion sale to Adobe was abandoned in December 2023 due to intense regulatory pressure in Europe and the UK.
• Strengthened Financials – The company enters this new phase with a fortified balance sheet, having received a $1 billion termination fee from Adobe as part of the collapsed deal.
• Market Bellwether – Figma’s public offering is expected to be a significant test for the tech IPO market, providing a key indicator of investor appetite for high-growth software-as-a-service (SaaS) companies.

The move to go public marks a significant pivot for one of the tech industry’s most-watched private companies and raises new questions about its future as a standalone entity.

From Blocked Buyout to Public Offering: Why Figma is Pursuing an IPO

Figma’s path to the public market was reshaped by global regulators. The planned $20 billion merger with software giant Adobe, announced in September 2022, faced stiff opposition, particularly from the UK’s Competition and Markets Authority (CMA) and the European Commission. Regulators argued the deal would stifle innovation and competition in the digital design software space.

Faced with a protracted and likely losing battle, the two companies mutually agreed to terminate the acquisition in December 2023. As stipulated in their agreement, Adobe paid Figma a hefty $1 billion cash termination fee. This influx of capital provided Figma with substantial resources, eliminating any immediate need for fundraising and giving it the strategic flexibility to choose its next move. The decision to now file for an IPO indicates a clear strategy: to use the public markets to finance its next stage of growth and solidify its position as a dominant, independent player in the design world.

The $20 Billion Question: How Will Wall Street Value Figma?

The confidential nature of the IPO filing means key financial details, such as revenue and profitability, are not yet public. However, the central question for investors is the company’s valuation. The $20 billion price tag from the Adobe deal serves as a psychological benchmark, but market conditions have shifted since 2022.

Analysts will be closely watching for the public S-1 filing, which will reveal Figma’s financial health. Key metrics will include:

• Revenue Growth: How fast is the company growing its top line?
• Customer Metrics: Data on user acquisition, retention, and enterprise adoption will be critical.
• Path to Profitability: While high-growth tech companies often prioritize expansion over profit, investors will want to see a clear and credible plan for long-term profitability.

The $1 billion termination fee significantly de-risks the company’s financial position, but the final valuation will depend on its performance and the broader market’s willingness to invest in growth-stage tech. Its last private valuation before the Adobe deal was $10 billion in 2021.

A Bellwether for Tech: What Figma’s IPO Signals to the Market

Figma’s IPO is not just a story about one company; it’s a barometer for the entire tech sector. The IPO market has been tepid for several years, but recent debuts from companies like Reddit and Astera Labs have shown signs of life. A successful and highly valued Figma IPO could open the floodgates for other “unicorn” startups that have been waiting for favorable conditions to go public.

Conversely, a lukewarm reception could signal that investor skepticism toward tech valuations remains. The offering will also redefine the competitive landscape. As a publicly traded company, Figma will have access to capital to expand its product suite, potentially moving into new areas and increasing pressure on competitors like Adobe and Canva. The outcome of this IPO will likely influence the strategic decisions of tech companies and investors for the foreseeable future.