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As Figma goes public, a turning point in the long-awaited IPO market recovery takes shape

July 31, 2025
in Business
Reading Time: 18 mins read
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They’re about the past and the future, about the company that’s going public and the wider market. IPOs are moments of truth—will public market investors, literally, buy what VCs have been backing for years? It’s also an event that tests how people are thinking about the wider IPO market. Are we, after all this time, so back?

On Wednesday, Figma, the design software unicorn led by Dylan Field, completed its initial public offering, raising $1.2 billion in proceeds ($1.4 billion if you include the over-allotement) for the company and some of its early shareholders, signaling strong demand for its shares which will begin trading on the New York Stock Exchange this morning. Figma seemingly sailed through its investor roadshow, upping its share price from the initial $25 to $28 range to the $33 it ultimately priced at. And after the company’s $20 billion planned merger with Adobe fell apart a year-and-a-half ago, the $19 billion valuation that Figma has fetched in its IPO is a pretty remarkable testament to its potential as a standalone business.

Derek Hernandez, emerging technology senior analyst at PitchBook, says that even compared to successful IPOs of late, Figma is singular, with its year-over-year revenue growth approaching 50%, and its Q1 profitability (Figma’s Q1 net income was $44.9 million). 

“Figma stands out even among recent high-growth software IPOs like Circle and CoreWeave,” Hernandez said via email. “Figma has both scale and earnings and is a prime example of a high-growth, VC-backed company with a strong narrative that the market is eager for, positioning it as one of the most credible high-growth listings this year.”

This is, ultimately, high praise—in June, stablecoin firm Circle was priced at $31 a share, and closed yesterday at about $190, while CoreWeave’s initially muted IPO still has the company up about 150% year-to-date. High praise, of course, also means high expectations. This, perhaps, has long been true of Figma: A look at the company’s SEC filings shows that a staggering four top VC firms have stakes in Figma valued north of $1 billion—Index, Greylock, Kleiner Perkins, and Sequoia. 

And while the fallout from the failed Adobe merger was public, that attempted merger also lingers in the background as a positive signal of sorts, “which served as a massive validation of Figma’s strategic importance and market position,” said Greg Martin, managing director at Rainmaker Securities, via email. Adobe looms in Figma’s past and its future, added Martin, who noted that Figma has both the opportunity and challenge of “overtaking Adobe as the leading design software company, with its cloud-native collaborative platform.”

One interesting detail: Figma itself only raised $411 million. Most of the proceeds are going to a group of selling shareholders (including VCs) each taking a small slice off the table. But the biggest selling shareholder is MCF Gift Fund, part of the Marin Community Foundation, a philanthropic organization which sold 13.4 million shares for a cool $441 million.

For today, though, it appears that Figma could be the harbinger of a simmering truth: that the market for venture-backed IPOs is in a thoughtful recovery. PitchBook’s Hernandez points out via email that there have been 119 offerings year-to-date, up 45% year-over-year. 

“Figma could serve as a bellwether for the market today,” Hernandez wrote Fortune. “It may provide proof-of-concept for other SaaS names, such as Canva, Netskope, and Databricks… Should Figma stumble out of the gate, especially with all its strengths, this may reinforce some caution among late-stage VCs and delay other large tech floats.”

This isn’t a 2021 deluge, but it’s not an early-2024 drought either. 

“While investor appetite has been selective, Figma shows that there’s still strong demand for companies with compelling growth stories, strong fundamentals, and clear differentiation—especially in categories like SaaS and AI,” said Rainmaker Securities’ Martin via email. “We’re not back to the frothy environment of 2021, but high-quality companies are beginning to test the waters successfully again.”

If IPOs are prisms, Figma’s a flashpoint. Now, we see what shines through. 

Fortune Term Sheet podcast hosted by Allie Garfinkle graphic with photo of Allie, links to YouTube video

Introducing the Term Sheet Podcast… After years in your inbox, Term Sheet’s coming to a podcast feed near you. Today, we’re launching the Term Sheet Podcast—bringing this long-loved newsletter to life in audio and video. Each week, I’ll sit down with investors and founders to break down the biggest deals, trade takes, and drop at least one dad joke. First up: Will Hurd, Chief Strategy Officer at CHAOS Industries. He’s been a presidential candidate, congressman, and undercover CIA officer. You won’t want to miss it, so listen here. And, as always, hot takes, reviews, and general feelings go to alexandra.garfinkle@fortune.com. 

See you tomorrow,

Allie Garfinkle
X:
@agarfinks
Email: alexandra.garfinkle@fortune.com
Submit a deal for the Term Sheet newsletter here.

Joey Abrams curated the deals section of today’s newsletter. Subscribe here.

Venture Deals

– Ramp, a New York City-based financial operations platform, raised $500 million in Series E-2 funding. ICONIQ led the round and was joined by Sutter Hill Ventures, Lightspeed Ventures, T. Rowe Price Associates, GV, and others.

– Oxide Computer Company, an Emeryville, Calif.-based cloud computing company, raised $100 million in Series B funding. US Innovative Technology Fund led the round and was joined by existing investors Eclipse, Intel Capital, Riot Ventures, and others. 

– Motive, a San Francisco-based AI-powered Integrated Operations Platform for the physical economy, raised $150 million in funding. Kleiner Perkins led the round and was joined by AllianceBernstein and existing investors.

– Prophet Security, a Palo Alto, Calif.-based security platform, raised $30 million in Series A funding. Accel led the round and was joined by Bain Capital Ventures and others.

– PlayerZero, an Atlanta-based predictive software company that uses AI agents to fix coding problems before that code is released, raised $15 million in Series A funding and $5 million in seed funding. Foundation Capital led the Series A round and Green Bay Ventures led the seed round. 

– C8 Health, a New York City-based practices implementation platform for health care, raised $12 million in Series A funding. Team8 led the round and was joined by 10D and Vertex Venture Israel.

– Metaforms, a San Francisco-based AI platform for market research agencies, raised $9 million in Series A funding. Peak XV Partners led the round and was joined by Nexus Venture Partners and Together Fund.

– FloVision Solutions, a South Bend, Ind.-based company developing AI-powered yield and quality analytics for protein production, raised $8.7 million in Series A funding. Insight Partners led the round and was joined by Serra Ventures, SOSV, and Rockstart.

– Cyata, a Tel Aviv, Israel-based control plane for agentic identities, raised $8.5 million in seed funding. TLV Partners led the round.

– Runloop, a San Francisco-based infrastructure platform for developing and deploying AI coding agents, raised $7 million in seed funding. The General Partnership led the round and was joined by Blank Ventures.

– RunReveal, an Austin, Texas-based security data platform, raised $7 million in seed funding. Costanoa led the round and was joined by Runtime Ventures, Modern Technical Fund, Okta Ventures, and angel investors.

– Tonic Security, a Tel Aviv, Israel-based cybersecurity startup, raised $7 million in seed funding. Hertz Ventures led the round and was joined by Vesey Ventures and angel investors.

– Caseflood.ai, a San Francisco-based legal AI agent, raised $3.2 million in funding from Acquisition.com, Y Combinator, Rebel Fund, Four Cities Capital, Elevation Capital, Amino Capital, and others.

– Dawnguard, an Amsterdam-based cybersecurity company, raised $3 million in pre-seed funding. 9900 Capital led the round and was joined by angel investors. 

Private Equity

– Contentsquare, backed by Sixth Street, acquired Loris AI, a New York City-based conversation intelligence platform. Financial terms were not disclosed.

– DataServ, a portfolio company of Renovus Capital, is merging with FactX, a North Andover, Mass.-based IT and consulting firm. Financial terms were not disclosed.

– KKR acquired a majority stake in HealthCare Royalty Partners, a Stamford, Conn.-based biopharma royalty company. Financial terms were not disclosed.

– Partners Group acquired a minority stake in Nozomi Networks, a San Francisco- and Mendrisio, Switzerland-based provider of industrial cybersecurity software. Financial terms were not disclosed.

Other

– Evercore agreed to acquire Robey Warshaw, a London, U.K.-based independent advisory firm, for a total consideration of $196 million.

– Silvaco agreed to acquire Mixel Group, a San Jose, Calif.-based mixed-signal IP provider. Financial terms were not disclosed. 

Credit: Source link

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