Figma IPO: the complete investor's guide

What is Figma and why should Australian investors care?

Figma is the world's leading collaborative design platform, used by 95% of Fortune 500 companies and 13 million monthly active users globally. The San Francisco-based company revolutionised digital design by moving from desktop-based tools to real-time browser collaboration, directly challenging Adobe's dominance in creative software.

The company posted $749 million revenue in 2024 with 48% year-over-year (YoY) growth while achieving 91% gross margins and $44.9 million net income in Q1 2025. This combination of hypergrowth and profitability places Figma among the elite SaaS companies globally, with a Rule of 40 score of 63 ranking in the top 5% of software firms.

Figma represents exposure to collaborative digital tools enhanced by AI as distributed teams increasingly rely on such platforms. The platform's expansion beyond design into broader enterprise collaboration positions it within the $47 billion enterprise software market.

When and where will Figma trade?

Trading begins on NYSE at 9:30am (EDT) 31 July, 2025 (11:30pm AEST). The 40x oversubscription indicates exceptional institutional demand that historically correlates with strong opening day performance.

Historical data from oversubscribed tech IPOs shows first-day premiums typically range 13-35% above initial public offering (IPO) pricing. Market observers have noted 12-month price targets averaging $42, though outcomes vary significantly based on execution and market conditions.

What are Figma's key financial metrics?

These metrics place Figma among the top 5% of SaaS companies globally and support its premium valuation multiple.

What are the main investment risks and opportunities?

Key opportunities:

• Market leadership in fast-growing collaborative design space
• AI integration driving 51% feature adoption rates (vs 21% prior year)
• Expansion beyond design into broader enterprise collaboration ($47B market)
• Strong network effects as teams standardize on platform
• Recession-resistant business model with high switching costs

Primary risks:

• High valuation at 20x forward revenue vulnerable to multiple compression
• Intense competition from Adobe, Microsoft, and emerging AI-native tools
• Heavy AI investment could impact near-term margins
• Dual-class structure concentrates control with CEO Dylan Field (73.6% voting power)
• Economic downturn could pressure enterprise software spending

Competition analysis: While Adobe remains formidable with its Creative Cloud suite, Figma's collaborative advantage and web-first architecture have proven difficult to replicate. Adobe's XD product is now in maintenance mode following the failed $20 billion acquisition attempt.

What trading patterns do IPOs typically exhibit?

IPO trading commonly experiences extreme volatility during opening periods (11:30 PM-12:00 AM AEST) with wide bid-ask spreads, while mid-session periods generally show more stable conditions. With 40x oversubscription, opening premiums above IPO prices are typical market behavior.

Investors use various approaches to manage IPO volatility, including different order types, position sizing strategies, and risk management tools. Technical analysis often identifies resistance levels around 30% premiums to IPO prices, with support near initial pricing ranges.

What factors do investors evaluate when considering IPO investments?

Figma represents a technology platform entering public markets with strong financial metrics, market position, and growth prospects in the AI-enabled collaboration space.

Investor characteristics commonly aligned with IPO investments:

• Understanding of technology sector dynamics and SaaS business models
• Tolerance for significant volatility during initial trading periods
• Long-term investment horizons to navigate market cycles
• Interest in exposure to future-of-work trends and AI-enabled productivity

Factors that may indicate IPO investments are less suitable:

• Requirements for steady income streams (Figma doesn't currently pay dividends)
• Low tolerance for price volatility typical of growth stocks
• Limited experience with international investing complexities
• Need for immediate liquidity or short-term investment goals

IPO investments involve various considerations including company fundamentals, market positioning, competitive landscape, and individual investor circumstances. Position sizing approaches vary significantly based on personal risk tolerance and portfolio objectives.