Figma's IPO: A Golden Ticket or a Valuation Trap?

The long-rumored Figma IPO is finally here. After its blockbuster deal with Adobe fell through 18 months ago, the unicorn that revolutionized collaborative product design is officially knocking on the doors of the public market.

On July 21, 2025, Figma publicly filed its S-1 registration statement with the U.S. Securities and Exchange Commission (SEC) and immediately kicked off its global roadshow. For designers, product managers, developers, and the entire SaaS industry, this is undoubtedly one of the most anticipated tech IPOs of 2025, following in the footsteps of Reddit and Plaid.

So, what kind of company is Figma? Is its valuation justified? And for the average investor, is this a train worth boarding? TianPan.co breaks down all the key information for you.

IPO Quick Facts

• Listing Details: Figma plans to list on the New York Stock Exchange (NYSE) under the ticker symbol FIG. Its roadshow is currently underway, with pricing expected by the end of the month.
• Price and Valuation: The initial price range is set at $25 to $28 per share. The company plans to issue approximately 12.5 million new shares, while existing shareholders, including the CEO and early investors, will sell around 24.5 million shares.
• Fundraising Goal: At the top of the price range ($28), Figma aims to raise approximately $1 billion from the IPO, targeting a fully diluted valuation of $16.4 billion.

Financial Fundamentals: A Textbook Case of High Growth and Profitability

Figma's S-1 filing paints an enviable financial picture, perfectly embodying the core traits of a top-tier SaaS company:

• Robust Revenue Growth: In fiscal year 2024, Figma generated $749 million in total revenue, a remarkable 48% year-over-year increase. This momentum continued into the first quarter of 2025, with revenue growing 46% year-over-year.
• Stellar Gross Margins: The company consistently maintains gross margins of around 88%, a testament to its pure-play software subscription model and efficient cloud infrastructure.
• Achieved Scalable Profitability: Unlike many startups still burning cash to fuel growth, Figma is already comfortably profitable. In Q1 2025, its net income impressively tripled compared to the same period last year.
• Strong Customer Base & Stickiness: Figma is not just a favorite among individual designers; it has successfully penetrated the enterprise market. Its client roster is a who's who of global tech giants, including ServiceNow, Workday, and SAP. Crucially, its Net Revenue Retention (NRR) rate exceeds 130%, indicating that existing customers are consistently spending more over time—a powerful competitive moat.

Valuation Analysis: Going Head-to-Head with Giants

Is a $16.4 billion valuation too steep? Let's use the Price-to-Sales (P/S) ratio, a key metric for growth stocks, to compare Figma with its public market peers.

Metric	Figma (FIG) Estimate	Adobe (ADBE)	Atlassian (TEAM)	HubSpot (HUBS)
TTM P/S (Trailing 12-Months)	~22x	~12x	~15x	~10x
2025E P/S (Forward Estimate)	~16x	-	-	-
Notes	45%+ Growth	Design Ecosystem Leader	High-Margin Collab Software	~25% Growth

The conclusion is clear: Figma is trading at a significant premium to most established SaaS companies. The market is willing to pay up for its exceptional growth rate, superior profitability, and strong product-led moat.

It's worth noting that while its current TTM P/S ratio of ~22x is high, it's considerably more "rational" than the nearly 40x P/S multiple implied by Adobe's $20 billion acquisition offer in late 2022.

Market Sentiment and Potential Risks

• The Bright Side: A Warming IPO Market The U.S. IPO market has seen a healthy rebound in 2025, with over 100 companies going public so far. The solid post-listing performance of other high-profile tech companies like Reddit (RDDT) and Plaid has created a favorable window for Figma.

• The Risks: Three Things to Watch

  1. Significant Insider Selling: The S-1 reveals that in addition to the new shares being offered, CEO Dylan Field plans to sell approximately $60 million worth of his personal stock, while early backers like Index Ventures and Sequoia Capital will also be cashing out. This could create downward pressure on the stock price in the short term.
  2. Can the Growth Last?: After walking away from the Adobe deal, Figma must prove it can continue its rapid penetration of the massive enterprise market on its own. If its revenue growth slows from over 45% to below 35%, its premium valuation will face serious compression risk.
  3. The Macro Environment: As a quintessential high-growth tech stock, Figma's valuation is highly sensitive to interest rate changes. While the Federal Reserve is widely expected to begin cutting rates, any delay or deviation from that path could dampen sentiment for all growth stocks.

The 3-Question Pre-IPO Checklist

For eager investors, ask yourself these three questions before jumping in:

1. What's your liquidity plan? US IPOs typically settle in two trading days (T+2). If the stock breaks its issue price on day one, do you have a clear stop-loss strategy?
2. What's your tolerance for this valuation? Are you comfortable paying a P/S multiple of 16-22x? Your portfolio should be prepared to weather a potential drawdown of 30-40%.
3. What's your holding period? If your strategy is to "flip" the IPO for a quick profit, be aware of the risk of a weak debut. If you plan to hold long-term, you need to believe in Figma's ability to continue disrupting enterprise workflows and successfully launch competitive generative AI design tools.

Investment Perspectives (Personal Views, Not Financial Advice)

• For Short-Term Traders: If you manage to get an allocation, consider that similar high-growth SaaS IPOs have seen an average first-day pop of 25-30%. If the stock jumps more than 20% at the open, taking some profit off the table could be a prudent move. If it opens near or below its issue price, exercise extreme caution.
• For Long-Term Investors: Figma is undeniably one of the defining software companies of its generation, boasting powerful network effects, a global subscription model, and the massive future catalyst of generative AI. Its main drawback is its expensive valuation, which is highly dependent on sustained growth. For those with a 3+ year investment horizon, consider initiating a small "starter" position and re-evaluating whether to add more after the 180-day lock-up period expires.
• For Risk-Averse or Access-Constrained Investors: Participating in a US IPO can be difficult without access to a brokerage that offers allocations. If you can't get in on the offering or prefer to avoid the initial volatility, be patient. It often pays to watch from the sidelines and look for a more attractive entry point 3-6 months after the IPO, once the initial hype has settled.

Figma's public debut is a triumph for the product-led growth (PLG) model and a major milestone for the design industry. Whether it can continue its legendary run in the public markets remains to be seen.

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Disclaimer: The author is not a licensed investment advisor. All information in this article is for informational purposes only, based on public filings and market reports, and does not constitute investment advice. All investments carry risk; please conduct your own due diligence.

Sources:

• Reuters
• Bloomberg
• Figma Blog
• TechCrunch