The design software startup Figma sold shares at $33 in its initial public offering, and on Thursday, the price more than tripled in its New York price Exchange debut.
The high opening burst is the latest sign that the tech IPO market has rebounded from a multi-year hibernation that began in early 2022, when interest rates were rising and inflation was skyrocketing.
In addition to health-tech firms Hinge Health and Omada Health, this year has seen the introduction of online bank Chime, stablecoin issuer Circle, and artificial intelligence infrastructure provider CoreWeave.
At $85 on its debut transaction, Figma was worth around $50 billion. Trading under the ticker symbol FIG, the stock was stopped when it surged beyond $112 and closed at $115.50, a 250% gain.
At the conclusion of the day, the company’s market value was close to $68 billion. Abode agreed to pay $20 billion to acquire Figma in 2022, but the deal fell through in 2023 because U.K. regulators stated that the partnership would probably hurt competition.
Figma, a web-based software company led by 33-year-old CEO Dylan Field, enables collaboration on digital whiteboards, PowerPoint presentations, and app and website designs.
No matter how the market debut turns out, Field told CNBC’s “Squawk Box” on Thursday that the business must “stay focused, stay on mission, listen to our customers, and keep our priorities in mind.”
“The most important thing to remind myself of, the team of, is that share price is a moment in time,” said Field, whose stake in the company is worth over $6 billion based on Thursday’s closing price. “We’re going to see all sorts of behaviour probably today, over the weeks ahead.”
Two-thirds of the more than 13 million monthly users of Figma are not designers. According to the prospectus, Figma was receiving over 1,000 clients paying over $100,000 a year as of March 31.
Customers include Uber, Netflix, Microsoft, and Google. Figma stated in its preliminary results filing for the second quarter that it made between $9 million and $12 million in operating profits on $247 million and $250 million in revenue, with sales increasing by almost 40% on an annual basis.
In a filing last week, Figma stated that the company would price its shares between $25 and $28 each. It released another update on Monday, requesting a price range of $30 to $32, and then setting the final price at $1 more than that range.
“I think given that Figma did so well with their pricing last night, and there is so much demand that has persisted still in the order book this morning for this company, I think this will open the floodgates,” Martin said.
