Figma IPO: S1 Breakdown

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From multiplayer design tool to the OS for digital product creation.

It’s here.

Figma filed to go public in April of this year and left nerds like me refreshing the SEC.gov archives for two months like a cat in heat. But the wait was well worth it.

This company is the strongest IPO of the year.

Founded in 2012, the company started as a web-based design tool and evolved into a broader collaboration platform used by designers, PMs, and engineers to build digital products from scratch. It’s what happens when the design file becomes the product spec, whiteboard, and roadmap… all in one.

Some key numbers from the filing:

(warning: don’t read while operating heavy machinery or pouring milk):

Figma’s journey has been uniquely shaped by its viral bottoms-up motion. They are the golden child of PLG.

And if you’re like me, you’ve experienced it in action: one designer sharing a URL inside a company often kicks off the adoption curve. Next thing you know, the CFO and the entire FP&A team mysteriously have licenses raking in $15 / month / user.

Its failed acquisition by Adobe, which resulted in a $1B breakup fee, gave Figma extra cash and extra notoriety back in 2022. The company used that momentum to launch a suite of new products in 2024 and 2025 that move it closer to becoming a full-stack platform for digital product development. And boy, did they keep compounding.

It started with design files. Now it’s building the OS for product teams.

Figma was founded on a simple insight: design should happen in the browser, and in multiplayer mode — not in isolation on your desktop (or worse, PPTX). The core product — Figma Design — lets teams collaboratively build user interfaces in real time, using only a web link to share work.

Over the past four years, Figma has expanded beyond UI design to support the full product development lifecycle. The platform now includes:

The pitch is clear: one platform to ideate, design, build, and ship. As of Q1 2025, 76% of customers used two or more Figma products, up from 64% a year earlier.

The product strategy leans heavily into extensibility (vocab word!). Over 10,000 community-built plug-ins and widgets sit on top of Figma’s API layer, making the product sticky across roles and teams.

And you see that stickiness play out in their incredible retention rates below.

Butts in seats — priced by role, scaled by collaboration.

Figma’s growth starts at the grassroots. Designers sign up individually, invite teammates into their files, and soon the design org — and eventually the broader product team — is collaborating in multiplayer mode. That bottoms-up adoption flows into a more traditional sales motion, with a direct sales team focused on upselling to Organization and Enterprise plans. As of Q1 2025, those top-tier plans accounted for 70% of total revenue.

Importantly, 70% of those larger deals started with a user on a Professional plan, highlighting the strength of Figma’s viral loop. A shared link is often the first step in a multi-year customer lifecycle.

Figma monetizes via a per-seat, per-month subscription model. Customers can choose between annual and monthly billing, with pricing tiers based on scale and administrative features:

More recently, Figma has layered in role-based seat types to better monetize cross-functional teams:

This pricing architecture unlocks revenue from previously non-paying personas. As of Q1 2025, developers made up 30% of monthly active users, and many are now monetized through Dev Seats.

Looking ahead, Figma hinted at potential non-seat-based pricing, especially for newer SKUs like Figma Make and Figma Sites. These products are still in beta and not yet fully monetized — but represent a path to expanding ARPU without adding headcount.

Beyond monetization, Figma invests heavily in community. It supports over 200 Friends of Figma chapters globally and hosts Config, its annual user conference, which has become a fixture in the product and design calendar. Developer / PM evangelism is a playbook we’ve seen multiple tech companies take to the bank, like Gitlab, Docker, and Atlassian.

High growth. High margin. Actually profitable.

Figma ended 2024 with $749M in revenue, up 48% year-over-year from $505M in 2023. The company has carried that momentum into 2025, generating $228M in Q1 revenue, a 46% increase over Q1 2024. That clocks in at $912M in ARR.

Margins reflect the efficiency of a browser-based, product-led business:

Figma's Rule of 40 score in Q1 2025 was 63 (46% revenue growth + 17% operating margin) — well above the SaaS benchmark of 40.

If we look at their March 24 vs March 25 spend by category

Notably, they are all growing slower than revenue, demonstrating operating leverage.

The company’s 2024 net loss of $732M was driven almost entirely by $889M in one-time stock-based comp related to the terminated Adobe acquisition. When you’ve been around since 2012, you’ve got a lot of stock sitting on your books. Stripping out that noise reveals a business with real and consistent profitability.

These numbers suggest a strong land-and-expand engine, backed by both viral usage and a seasoned enterprise sales motion.

Figma is only starting to monetize newer SKUs like Make, Buzz, and Sites — all still in beta as of the filing. Future monetization could also include non-seat-based pricing (e.g. usage-based or feature-tiered billing).

International markets remain underpenetrated. While specific revenue breakdowns weren’t disclosed, the company highlights global expansion as a core pillar of growth going forward.

A cap table full of heavyweights.

This stat blew my mind - a remarkable six institutional investors will make north of $1 billion in proceeds, assuming the company eclipses the $20 billion valuation mark.

That puts Field’s stake at ~$1.58B on paper, and Index’s at ~$3.7B.

Not everything is editable.

Figma looks strong on paper — but a few headwinds and unknowns are worth watching:

What might Wall Street pay for browser-based design at scale?

Let’s apply a range of public SaaS revenue multiples to that number:

NTM Revenue Multiples Applied:

At 15x forward revenue, Figma lands around a $17B valuation — which looks reasonable for a business with elite retention, margin, and growth.

But I think 20x is warranted. Their financials are rock solid.

15x feels more like the baseline, and 25x feels like the immediate upside.

$22B to $27B feels like a rich, but earned and logical range out of the gates.

Revisionist history, but it’s now clear that if the Adobe merger had gone through, they wouldn’t have over kicked their coverage and overpaid. Figma has continued to compound greatness.

Figma is a SaaS standout: browser-native, product-led, and actually profitable. It checks the Rule of 40 box, boasts best-in-class margins, and has a clear runway for multi-product growth.

It will be priced like a generational winner. And to justify the valuation, Figma has to show that it’s more than a design tool — and that it can keep expanding into new functions, markets, and monetization models without losing the simplicity that made it great.

This isn’t a bet on revenue multiples. It’s a bet on a new category of productivity software, one that spans multiple teams and becomes the operating system for how product is made.

None of this is investment advice. I write it at a kitchen counter that’s v sticky with ice-cream from my three year old. Do your own homework.