*

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

*

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

*

Listing signals IPO market recovery, analysts say

*

IPO values design software company at $19.34 billion

By Manya Saini and Niket Nishant

July 31 (Reuters) - Design software firm Figma ( FIG )

will begin trading later on Thursday after raising $1.22 billion

in a blowout U.S. float, setting the stage for a flurry of

high-growth tech listings and strengthening a rebound in the IPO

market.

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

raised range, secured a valuation of $19.34 billion, just shy of

the $20 billion it was set to fetch in a scrapped 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."

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.

The San Francisco, California-based startup and some of its

existing investors sold 36.9 million shares in the offering.

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 ).

"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.

AI RACE

Design software firms are racing to integrate generative-AI

tools that automate tasks like image creation, layout

suggestions and code generation, as companies jostling 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're already investing heavily in AI and we plan to double

down even more in this area. AI spend will potentially be a drag

on our efficiency for several years," Figma ( FIG ) CEO Dylan Field in

the IPO prospectus. "AI is also core to how design workflows

will evolve going forward."

The push 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.

Figma's ( FIG ) prominent backers include Silicon Valley venture

capital giants Kleiner Perkins and Sequoia.

Its revenue surged 46% year-over-year to $228.2 million in

the three months ended March 31.

For the full-year 2024, its revenue jumped 48% to $749.01

million. It posted a per share loss of $3.74 versus a profit of

$1.62 in 2023.

It is common for high-growth startups to be unprofitable at

the time of listing, but investors have turned more selective,

placing greater focus on those with clear paths to profitability

and sustainable growth.

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)