Figma debuts on Wall Street at $33 per share – then more than triples

Investors cash in as design firm goes public after takeover dreams dashed

updated Adobe competitor and one-time acquisition target Figma debuted on public markets on Thursday with 36,937,080 shares of Class A common stock at $33 apiece, valuing the web design tool developer at $19.3 billion. But the price-setters apparently underestimated demand dramatically, as investors sent the price up more than threefold by the end of the trading day.

The offering consists of 12,472,657 shares of Class A common stock from Figma and 24,464,423 shares of Class A common stock from existing stockholders. Shares, which started trading on the New York Stock Exchange around 2pm local time, shot up more than 256% by the end of the trading day a couple hours later.

The initial valuation in cash and stock was a little less than the $20 billion Adobe was going to spend acquiring the company before regulators stepped in and the deal was dropped. "It's not the outcome we hoped for," Figma CEO Dylan Field said of the failed deal, though the IPO will likely cushion the blow somewhat.

Figma sent out its IPO prospectus a month ago and has since revised the proposed price upward. On July 21, it put the price in the range of $25 to $28 per share. By July 28, it was between $30 and $32 per share, and on July 31, it had risen to $33 per share.

The IPO will be closely watched by venture capitalists and investors hopeful of finally realizing a return on the billions poured into tech companies over the years. The Figma IPO will also represent a windfall for early investors, as well as some of the company's staff, including its CEO.

A year ago, Figma was valued at $12.5 billion. It laid claim to 13 million monthly active users in its prospectus. Figma's products start with a free tier, but go up to $90 per seat per month (billed annually) for the Enterprise tier.

In its prospectus, the company noted the arrival of AI technologies as a risk, as well as the opportunities presented, considering the creative nature of Figma's products. While there are concerns about the ethical, reputational, and legal challenges arising from AI, it's not enough to stop the developer from spending millions on the technology.

"We were founded to help anyone go from imagination to reality," Figma wrote in its prospectus, "and we believe that AI is critical to delivering our vision."

Investors expect that vision to translate into a substantial return. ®