The digital design industry has long faced fragmented workflows and isolated tools, hindering real-time collaboration and smooth handoffs between designers and developers. Figma was created to address these issues, providing a web-based platform that allows multiple users to design, prototype, and comment simultaneously. This eliminates downloads and version conflicts while enabling instant collaboration from anywhere.
Now, Figma is approaching one of the most eagerly awaited IPOs of 2025, with experts estimating it could raise to $1.5 billion, potentially rivalling or surpassing the largest tech offerings of the year. The company’s financial results highlight its impressive growth: $749 million in revenue for 2024 (a 48% increase from the previous year), a rolling 12-month revenue of $821 million, and a gross margin of 91%.
After a one-time, compensation-related loss in 2023, Figma returned to profitability by late 2024 and into the first quarter of 2025, reporting $228.2 million in Q1 revenue (a 46% year-over-year increase) and net income tripling to $44.9 million.
IPO mechanics: Control, liquidity, and market signals
Figma’s S-1 reveals a dual-class share structure. CEO Dylan Field held about 75% of voting rights before going public through super-voting Class B shares. Co-founder Evan Wallace’s family trust owns roughly one-third of these special voting shares, but Field controls their votes, strengthening leadership and ensuring the company’s vision remains consistent.
The S-1 discloses a significant 2024 tender offer, enabling employees and executives, including Field, who sold $20 million in shares, to access liquidity before the IPO. While this can boost morale and help with retention, it may also invite investor scrutiny regarding insider confidence.
Figma reports very little debt, only a revolving credit line, demonstrating careful financial management. Nevertheless, the S-1 suggests there could be future debt updates, an aspect investors should monitor.
Solving the design dilemma
Figma was established in 2012 by Dylan Field and Evan Wallace, who met as computer science students at Brown University. Field, a Thiel Fellow, left college with a $100,000 grant to pursue his goal of making design accessible and collaborative for everyone. Their mission is to empower creativity and teamwork through a platform that democratizes design, making it accessible to all skill levels and backgrounds.
Frustrated by clunky, isolated design tools, Field and Wallace set out to create a browser-based solution that would transform team collaboration. Figma aims to revolutionise design teamwork by breaking down barriers, encouraging creativity, and creating a global community of designers who can collaborate in real time, regardless of location or device.
What sets Figma apart: Tech, teamwork, and the AI edge
Figma’s main innovation is its cloud-based architecture, allowing real-time, multi-user collaboration similar to Google Docs for design. Its key features include:
- Real-time collaboration: Multiple users can edit and comment simultaneously, speeding up feedback and revision processes.
- Design systems and reusable components: Promoting consistency and efficiency across projects.
- Integrated prototyping and developer handoff: Designers and developers can inspect, extract code, and implement designs seamlessly from one platform.
- Strong version control: Easily track, manage, and revert to previous design versions.
- Plugin ecosystem and community: Thousands of plugins and a lively community expand functionality and foster innovation.
Recent developments, such as acquiring AI-driven design platform Modyfi, indicate Figma’s focus on generative AI, motion design, and automation, which aims to outpace fast-growing competitors and AI-native startups. Although rivals like Sketch, Adobe XD, and Framer provide powerful tools, Figma’s distinctive browser-first, collaboration-focused approach and quick adoption of AI features give it an advantage.
Figma’s S-1 openly discusses the risk of failing to distinguish itself in an evolving AI landscape. Emerging players like Lovable are using generative AI to challenge established companies, and Figma admits there’s no guarantee its products will stay competitive as new AI technologies develop. This transparent risk acknowledgement adds realism to its IPO story and signals to investors that the upcoming competition will be intense.
What’s next for Figma?
Figma’s IPO signifies a new phase of independence and boldness. The funds will support global expansion, including obtaining FedRAMP certification for U.S. government contracts, reducing debt, and boosting R&D and acquisitions. Since over half its revenue already comes from outside the U.S., Figma aims to expand globally, enhance enterprise integration, and venture into new markets like no-code website builders and AI-driven design-to-code tools.
Founder Dylan Field will maintain majority voting control after the IPO, ensuring the company’s vision remains intact and allowing for quick decision-making in a rapidly changing market. Figma plans to focus on AI, broaden its platform beyond basic design tools, and pursue significant innovation and mergers to solidify its cloud-based, collaborative design leadership.
Although the S-1 does not provide an exact valuation, secondary trading and analyst commentary suggest Figma could be valued around $15–20 billion after going public. This context includes Adobe’s unsuccessful $20 billion acquisition attempt in 2022, which continues influencing investor perceptions of Figma’s long-term prospects.
