Figma IPO Skyrockets 230% on Day One – But Is It Too Late to Jump In?

On 31 July 2025, the company listed its shares at US$33. By the end of the day, the price had surged to around US$115.50, marking a gain of approximately 230%. That sharp rise pushed Figma’s value from US$19.3 billion to almost US$67.6 billion in a single trading session.

For a design software company, that’s a big leap — and it’s got everyone talking. Figma had already established itself as a go-to tool for designers and product teams. It’s easy to use, runs straight from the browser, and allows teams to work together in real time. So by the time it went public, there was already plenty of anticipation.

Now, the big question is: Did you miss your chance to invest? Or is this just the beginning of something even bigger? Let’s examine why Figma’s IPO took off — and whether buying the stock now still makes sense.

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What Is Figma?

Figma is not your typical software company. At its core, it’s a cloud-based design platform that helps teams build digital products, websites, apps, and software interfaces — all within a browser. What makes Figma stand out is its ability to let users design, share, and edit in real time, regardless of location. Think of it as the Google Docs of product design, but with powerful tools specifically built for UX, UI, and front-end collaboration.

Since launching in 2012, Figma has evolved from a smart startup into a major player in the design space. Its founders, Dylan Field and Evan Wallace, took a bold early step: instead of developing a heavy desktop app like Adobe or Sketch, they built a fast, browser-first experience. That decision paid off — especially during the COVID years, when remote collaboration became standard across industries.

As of mid-2025, the platform supports more than 13 million monthly active users and over 11,100 enterprise clients. Its customer base spans global brands, startups, agencies, and government teams — all relying on Figma to speed up design cycles and streamline team workflows.

What especially appeals to investors is that Figma is no longer just a single product — it’s building a full ecosystem. In addition to its flagship design tool, the company now offers:

• FigJam – a digital whiteboard for brainstorming and workshops
• Dev Mode – tools that help developers hand off and build more efficiently
• Figma Slides – for creating presentations with design elements
• Figma Sites – a new feature enabling users to publish websites directly from their designs

This “all-in-one” approach is helping Figma expand beyond design into product management, development, and internal communication, making it more valuable to businesses — and harder to replace.
In short, Figma has become more than a design tool. It’s evolving into a platform for digital product creation, which is why the buzz around its IPO wasn’t just about the numbers — it’s about where the company is heading next.

 

Why the IPO Soared

So why did Figma stock skyrocket on day one? It’s not every day a company jumps over 200% on its first trading session — so what made the Figma IPO of 2025 such a standout?
To start, the fundamentals looked strong. Figma reported US$228 million in revenue for Q1 2025, up 46% year-on-year. Net income also rose nearly threefold to US$44.9 million. That’s not just growth — that’s profitable growth, which is rare among software IPOs. Most tech firms at this stage are still burning cash to expand. Figma is doing both: growing and making money.

Then there are the margins. The company operates at a gross margin between 88% and 91%, depending on the reporting period, and maintains an operating margin of around 18%. That puts Figma well above the benchmark in the Rule of 40 — a common SaaS metric that combines revenue growth and profit margins. In short, Figma isn’t just popular — it’s efficient.

But it wasn’t just the financials fuelling the rally.
Figma’s IPO followed a high-profile event: the failed US$20 billion takeover by Adobe, which was blocked by regulators in late 2023. That deal falling through turned out to be a blessing in disguise. It allowed Figma to remain independent and double down on building its product roadmap without compromise. Investors saw a lean, mission-focused company determined to prove itself — and that narrative resonated.

There was also a significant supply and demand imbalance on day one. The company kept its float small, meaning only a limited number of shares were available to trade. At the same time, interest was sky-high — from institutional investors, retail traders, and anyone chasing the next big SaaS success. That scarcity helped turbocharge the opening price surge.

Finally, the tech market in 2025 had seen renewed optimism, especially for cloud-based platforms with real revenue and profitability. After a quiet IPO period in 2023–24, Figma’s strong numbers and loyal user base gave investors a reason to return to the IPO market.

So, this wasn’t just hype. It was a perfect combination of strong financials, a compelling growth story, and intense investor demand — all hitting at once.

 

The Price Tag: Valuation Under Scrutiny

Figma’s IPO may have been a clear success — but now, the focus shifts to whether the price is justified.
At its IPO price of US$33, Figma was valued at around US$19.3 billion. But after the stock surged to US$115.50, that valuation soared to roughly US$67.6 billion in a single trading day. While impressive, it also sets extremely high expectations.

At this level, Figma trades at a price-to-sales (P/S) ratio of roughly 16x to 22x — depending on whether forward or trailing revenue is used. That’s well above the software industry average, even higher than Adobe, which trades closer to 10x. In other words, the market is betting heavily that Figma will continue growing rapidly and expanding its margins.

Still, there are red flags. Analysts believe Figma will need to maintain 35–40% annual revenue growth just to sustain its current valuation — a challenging task, even for a strong business. CEO Dylan Field and early investors sold some shares during the IPO — a common practice — but it raised some concerns about valuation among analysts.

There are also broader risks. Much of tech’s rally in 2025 has been fuelled by expectations of interest rate cuts. If central banks delay or reduce those cuts, growth stocks like Figma could quickly fall out of favour.

So, while Figma is clearly a standout company, the market may have priced in too much, too soon. Valuation risk is real — and investors can’t afford to ignore it.

 

Can It Go Higher, or Is This the Peak?

After such a dramatic debut, it’s easy to think Figma’s best days are already priced in. But is that really the case?
The bull case remains strong. Figma is expanding rapidly — not just in user numbers but also in platform capabilities. New products like Figma Sites and AI-powered tools such as Make, Draw, and Buzz underscore its transformation from a design tool into a full product creation platform. Its push into AI-driven design automation could be a game-changer — allowing teams to generate design suggestions, streamline workflows, and work even faster. Add to that its global expansion strategy and deeply engaged enterprise customer base, and you’ve got a business that could scale well beyond 2025.

Analysts from Barron’s, AInvest, and Mostly Metrics have all flagged Figma as a textbook “platform-as-a-business” model — the kind the market loves to reward.

But the bear case carries weight, too. Adobe isn’t standing still. It still has deeper capital reserves, brand trust, and is rolling out its own AI capabilities to catch up quickly. If Figma starts to lose its speed advantage, growth could decelerate. Moreover, around 50% of its revenue comes from international markets — leaving it exposed to foreign exchange fluctuations and macroeconomic risks abroad.

With shares trading at 16–22x revenue, sentiment plays a big role. If tech stocks lose favour or Figma’s growth dips below the 35–40% range, the valuation may not hold — as noted by analysts like TianPan.
So, can it go higher? Yes — if it keeps innovating, growing globally, and sustaining high margins. But with so much optimism already priced in, the runway may not be as long as it appears unless execution remains flawless.

 

Investor Takeaway

After a near-230% IPO surge, where does that leave investors?
Short-term traders who entered on IPO day have seen substantial paper gains. For them, it may be wise to trim exposure — especially with insider lock-up expiries and interest rate risks looming.

Long-term investors, however, face a more nuanced decision. If you believe in Figma’s ecosystem, AI roadmap, and sticky enterprise usage, a small initial position might be worthwhile — especially after the stock settles from post-IPO volatility.

It’s also important to track the next few earnings reports. Updates on enterprise user adoption, revenue growth, and product expansion will offer clarity on whether the current valuation is sustainable.

Above all, this is not a stock to FOMO into. A staggered entry strategy — with careful sizing and review at each earnings release — may help investors manage risk while still participating in potential upside.

FAQs

• What does Figma do exactly?

  Figma offers cloud-based tools for design, prototyping, whiteboarding, and collaboration. It serves over 13 million monthly users globally.

• Why did Figma’s IPO price surge so dramatically?

  Strong revenue growth, high margins, limited float, and strong investor demand led to a surge of nearly 230% on day one.

• What’s Figma’s valuation now?

  Post-IPO, Figma’s market cap is near US$67.6 billion, with a price-to-sales multiple of around 16x–22x, depending on revenue assumptions.

• Should I buy Figma stock now?

  Only if you’re investing for the long term. The valuation is high, so a cautious, phased-in approach is recommended.

• What are the main risks to Figma’s share price?

  Slowing revenue growth, rising competition from Adobe, foreign exchange volatility, and broader market headwinds.