The Rundown - Deep Dive: Can Figma’s IPO Live Up to the Hype?

Episode Date: July 5, 2025

Design company Figma has officially filed for an IPO, 13 years after its founding. The founders’ vision was simple: make design so intuitive and collaborative that listing Figma on your résumé as a skill would feel as absurd as listing Google Docs. In this episode, we break down how the company grew into a global design powerhouse, why the Adobe acquisition fell through, and how AI is powering its next chapter. Hosted by Zaid Admani.This video is for informational purposes only and reflects the views of the host and guest, not Public Holdings or its subsidiaries. Mentions of assets are not recommendations. Investing involves risk, including loss. Past performance does not guarantee future results. For full disclosures, visit ⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠Public.com/disclosures⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠.

Welcome back to the rundown for another weekend deep dive. Today, we are talking about Figma. This design software company has changed the way the designers work and has become a massive business in the process, threatening incumbents like Adobe. These days, Figma is used by 95% of Fortune 500 companies and the company recently filed for an IPO. So in today's episode, we are diving into Figma's wild origin story,

their drama with Adobe, what really drives their business, and whether Figma is poised to become the next great public software company. We get a great show for you today. Let's dive in. So what actually is Figma? Well, the simplest way to describe it is if Google Docs met Adobe Illustrator. That, to be more exact, Figma is a collaborative browser-based design tool that lets teams work together on the same file in real time.

And when Figma came out, it was a game-changing tool, because before Figma, you would have to email Photoshop files back and forth amongst multiple teams and track all the versions. I mean, it was a real pain. So just like what Google Docs did to the Word Doc, Figma did to design software. Now, the idea for Figma came from Dylan Field and Evan Wallace, two computer science students at Brown University. Their vision was to make design accessible to everyone. And one of the first steps of making that a reality happened in 2012. That's when Dylan Field dropped out of college after landing.

a Teal Fellowship, which is a program where billionaire Peter Thiel pays people $100,000 to not go to college for two years and build something instead. Now what's funny is that Dylan's original pitch to the fellowship had nothing to do with design. Dylan wanted to build better software for drones, but eventually he and Evan landed on the idea for Figma. So Figma was born back in 2012 and launched publicly in 2015. And when this tool hit the market, it spread like wildfire. Startups loved it.

big companies adopted it, they had almost immediate product market fit. And suddenly, this little startup started taking market share from a giant like Adobe, who was the undisputed king of creative software. So Adobe noticed and made a bold move to make the problem go away. In a few short years after launching, Figma had become a legit threat to Adobe's dominance in the creative software space. So Adobe did something that every big tech company has done. They tried to buy their competition before they got two.

too big. In 2022, Adobe made a $20 billion offer to buy Figma, and Figma accepted. But the reaction to this deal was not great across the board. For one, Wall Street was not a fan. Investors thought that Adobe was paying way too much for Figma at the time. Adobe stock dropped 17% the day this deal was announced. It was the worst day for the company since 2010. Figma users were also not a fan of this deal because they were worried that Adobe would end up messing up Figma. But most importantly, the regulators had a problem with this deal. Antitrust regulators in the U.S., the UK and the EU, all raised red flags. They were worried that this deal would create a monopoly and suffocate the design software

market. So this drama dragged on for 15 months. Adobe tried to make the argument that Figma was only a small niche player in the space, but the regulators weren't buying it. In fact, the regulators were planning to file a lawsuit to block the deal. So the two companies called off the acquisition in December of 2023. But this breakup came. came with a very nice parting gift for Figma, they got $1 billion in all cash from Adobe as a

termination fee. So that brings us to today. Figma is an independent company with over a billion dollar war chess, and they're now marching towards an IPO on their own terms. So let's break down the numbers behind the company. Figma took the first step in filing for an IPO this past week by filing their S-1 with the SEC. This document includes a ton of interesting information about their business. In the S-1, Figma reported 13, million monthly active users. And what's crazy is that two-thirds of their users are non-designers. So they have everyone from product managers to marketers using their product. And what's cool is that was CEO Dylan Field's original vision for the company. He's literally said that putting

Figma as a skill on your resume will be as absurd as highlighting a Google Doc proficiency. And the numbers show that the company is well on their way. Figma reported $749 million in revenue in 2024, which is up $409,000, percent from 2023. And then in Q1 of this year, they pulled in $228 million, which is up 46% year over year, and their profits triple to $45 million. Figma says the surge in their business is being fueled by a combination of existing customers, spending more and a growing base of new paid users. What really stood out to me from the S-1 was how big their enterprise usage is. The number of customers paying over $10,000 a year jumped 45% and the number of customers paying over $100,000 a year grew by 53%. So a lot of big companies are using this product. In fact,

95% of Fortune 500 companies use Figma. And Figma makes a lot of money from these customers. And here's another stat that might surprise you. 85% of Figma's customers are outside of the U.S. with the international market now accounting for 53% of total revenue. The company estimates that their total addressable market is $33 billion, which includes the global workforce involved in product design and development. In fact, that market might only be getting bigger, especially as AI makes it easier to build more software faster. So Figma is now doubling down on AI. So how does Figma plan to keep the rocket ship growth going? Well, the company has been busy shipping new products and embracing AI. Figma's core product came out back in 2015. It was called Figma Design. And over the past few years,

Figma has shipped more products to help teams go from idea to finish product. The company launched FIGJAM in 2021, which is an online whiteboard tool meant for collaborative brainstorming. And then in 2023, Figma launched dev mode, which is a product meant to bring design and code closer together. This tool is tailored more for developers who now make up 30% of monthly active users for Figma. And just halfway through 2025, Figma has doubled its product portfolio with the launch of four products, Figma Sites, Figma Make, Figma Buzz, and Figma Draw. Now, Figma Make is the one that I want to focus on, because it's Figma's AI-powered tool that turns a prompt into a fully functional prototype in just minutes.

You could go into Figma Make and type in something like a luxury train booking app, and Figma will spin up an interactive prototype with clickable flows, custom UI, and production-ready code. No need to draw boxes or write CSS. Figma Make is like chat cheapy T meets Squarespace. And it's in this area that Figma is betting big. They believe that AI will radically accelerate product development, and they want to be the platform that powers all of it, from idea all the way through development. And they're putting their money where their mouth is because the company has doubled their R&D spending last year to $427 million.

In fact, 46% of their employees work in R&D. The company has hinted at building out their own AI models in the future. But they're not stopping there. Figma has also been aggressive on the M&A front. Figma has already made 10 acquisitions so far, and the company says they'll take, big swings when it comes to buying more startups. I mean, they got the money to do it. They have $1.5 billion in cash on their balance sheet. And they've also quietly been building relationships through Figma Venture, which is their investing arm. The company's already backed 18 companies

across AI infrastructure, design tooling, and developer collaboration. So the company seems to be firing on all cylinders right now. Figma's product roadmap is ambitious. They already have a big balance sheet to make some acquisitions. And this upcoming IPO might give them even more firepower to take on their competitors. Now, I know I just spent the entire episode glazing Figma, but I think we need to address some of the big competitors they have in the space. The big one, obviously, being Adobe. You know, Adobe pretty much invented the creative software space.

The company is worth $150 billion with decades of experience and customer lock-in. But Wall Street does think that Adobe might be vulnerable here, because their stock is down 35% over the last year. The other up-and-coming company I want to mention is Canva. Now, Canva has these set of tools that make it really easy to make social media graphics and flyers, and they've been shipping products lately targeting more professionals and embedding AI into their platform. Canva is based in Australia, and they're still a private company, but I have a feeling they might go public soon depending on how the Figma IPO goes.

And there's a few more competitors like Atlassian and Notion, and I'm sure a few more are going to pop up along the way. But right now, Figma seems to have an edge. They have a huge and growing customer base. People genuinely love using their software. and they're working to own the entire design decode pipeline. If they pull that off, they won't just be the future of design. They might be the future of how software gets built.

So that's the story of Figma, a company that started with a vision of making design as easy as writing a Google Doc. Today, Figma is one of the most essential tools in tech, and they're trying to redefine how software gets built in the AI era. That failed acquisition by Adobe in 2022 was a blessing in disguise, and it gave the company cash, clarity and a clear shot at the public markets as their own independent company.

Their product roadmap is stacked. The ambition is massive. But whether Figma becomes the next Adobe or just another cautionary tale like Slack, that'll depend on if they can stay ahead in this incredibly crowded AI powered race. Well, all right, guys, that's it for today's weekend, deep dive. If you guys enjoyed today's episode, don't forget to follow the podcast and leave us a review on Apple, Spotify, or wherever you listen to your podcast. If you are listening on Spotify or YouTube, let us know in the comments what companies or trends you want us to break down next.

And while you're at it, don't forget to hit us with a five-star rating as well. Thank you guys so much for listening. Shout out to Mike and Connor for all the help behind the scenes. And we'll see you guys back here on Monday.