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Figma ( FIG ) to list after $20 billion Adobe deal scrapped

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Design firm prices IPO at $33 vs proposed range of $30-$32

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Listing signals IPO market recovery, analysts say

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IPO values design software company at $19.34 billion

(Rewrites headline, paragraph 1 and 2 with stock indications)

By Manya Saini, Niket Nishant and Echo Wang

July 31 (Reuters) - Design software maker Figma's ( FIG )

shares were indicated to open at more than double their

initial public offering price on Thursday, setting the stage for

a flurry of high-growth tech listings and strengthening a

rebound in the IPO market.

If the stock starts to trade at the last indicated range of

$65 to $70 on the New York Stock Exchange, it would value the

company at more than twice the $20 billion price tag from a

now-abandoned buyout deal with industry giant Adobe in

December 2023.

The U.S. initial public offerings market has bounced back

after tariff-driven volatility briefly paused listings in April,

putting 2025 on track to end a nearly three-year dry spell.

"Fast-growing software IPOs have been extremely rare during

the past three years, so deals like this tend to get a lot of

attention," said Matt Kennedy, senior strategist at Renaissance

Capital, a provider of IPO-focused research and ETFs.

"Because of this three-year bottleneck, tech IPO investors

have been starved for new deals."

The company, which priced the IPO at $33, above an already

raised range, secured a valuation of $19.34 billion in the

listing.

Recent tech IPOs have drawn strong investor interest and

delivered solid post-listing gains, fueling optimism around new

offerings from high-growth and AI-focused firms.

"From a private markets perspective, Figma's ( FIG ) IPO is a

bellwether event for the tech sector," said Derek Hernandez,

senior analyst, emerging technology at PitchBook.

Figma ( FIG ) makes collaborative design software used to build

websites, apps and digital products, and customers include

streaming giant Netflix ( NFLX ), travel firm Airbnb ( ABNB )

and language learning app Duolingo ( DUOL ).

Its prominent backers include Silicon Valley venture capital

giants Kleiner Perkins and Sequoia.

"If you look at Figma's ( FIG ) positioning around AI, and the

ability to deliver massively improved experiences to its

customers with AI, that was not obvious back in 2022," said

Andrew Reed, a partner at Sequoia Capital and a board member of

Figma ( FIG ).

Sequoia Capital first invested in Figma ( FIG ) at $1.10 a share

during the company's Series C round. With Figma ( FIG ) pricing its IPO

at $33 a share, Sequoia stands to make a significant return on

its roughly $150 million investment, according to a source

familiar with the matter.

AI RACE

Design software firms are racing to integrate generative-AI

tools that automate tasks such as image creation, layout

suggestions and code generation, as companies jostle to win

enterprise clients and creative teams.

Figma ( FIG ), in its IPO filing, flagged intense competition,

particularly from rapid AI adoption, as a potential headwind,

warning it could cede market share.

"We've embedded different flavors of AI - both to lower the

floor (and) allow more people to participate in the design

process - while also raising the ceiling for individuals (and)

for companies to be able to have even more high craft in what

they're creating," said Chief Financial Officer Praveer Melwani.

The effort has accelerated since Adobe, Microsoft and others

began rolling out AI features aimed at speeding up workflows and

cutting costs.

"Software companies with a strong AI element to them seem to

be assets that investors want to buy," said Will Braeutigam,

U.S. capital markets transactions leader at Deloitte.

Figma ( FIG ), for its part, has rolled out several products built

around AI as it looks to stay competitive and meet growing

demand for automation in design workflows.

"If this company didn't have an AI strategy, it would not be

seeing this level of demand," Renaissance Capital's Kennedy

said.

Morgan Stanley, Goldman Sachs, Allen & Co and J.P. Morgan

are the lead underwriters of the IPO.

(Reporting by Manya Saini and Niket Nishant in Bengaluru;

Editing by Sriraj Kalluvila)