In response to huge investor demand, Figma dramatically increased the valuation on its IPO on Monday while keeping the size intact.
Morgan Stanley, Goldman Sachs, Allen & Co and JP Morgan are now marketing 36.9m shares, including 24.5m by selling shareholders, at US$30–$32, a step change from the US$25–$28 range at launch.
The banks communicated 30x oversubscription with strong support from long-only mutual funds and other investors. They are requiring investors to place orders with specific price and size details, providing additional granularity on specifics of investor demand, bankers involved with the offering told IFR.
The banks are closing the books to investor orders at 12:00pm Tuesday, ahead of pricing after the market close Wednesday for a Thursday debut on the NYSE.
The price and size order bookbuild, also known as ALPS, was designed to tamp down investor demand, and contrasts with the traditional practice of allowing investors to place market orders with the knowledge that orders are likely to be scaled back.
At the top of the revised range, the digital design software company is being valued at a market capitalization of US$19.2bn.
In 2022, Figma had agreed to sell itself to Adobe for US$20bn, though that acquisition fell apart in 2023 due to regulatory concerns. After collecting a US$1bn breakup fee on the failed M&A, the company conducted a private secondary sale of stock in 2024 at a US$12.5bn valuation to provide liquidity to existing shareholders.
Figma, whose software is used by 95% of the Fortune 500 companies to design apps and websites, is using money from the sale of 12.5m shares to pay US$330.5m of tax obligations associated with restricted stock units.
In the three months ended June 30, Figma expects to report a US$9m–$12m operating profit while growing revenue by 39%–41% to US$247m–$250m, based on preliminary unaudited results.
The IPO figures to be a huge payday for existing shareholders. Figma co-founder and CEO Dylan Field is selling 2.35m shares on the offering, with additional selling by VCs including Index Ventures, Greylock Partners, Kleiner Perkins Caufield & Byers, and Sequoia Capital.