Figma CEO's Comeback Journey: Regulatory Hurdles and Wall Street's Support

Previously, Adobe abandoned its $20 billion acquisition of the design software startup Figma due to regulatory pressure. Now, Figma went public on the New York Stock Exchange on Thursday, July 31, with a fully diluted market capitalization now approaching $70 billion.

Figma went public on Thursday, July 31 local time, bringing its co-founder and CEO Dylan Field a fortune of $1.8 billion. Image source: Gabriela Hasbun for Forbes

Original Title: "Regulators Hold Back, Wall Street Sets the Record Straight: CEO of Design Software Startup Figma Now a Billionaire"

In January 2024, when employees of the San Francisco design software startup Figma returned to the company after the Christmas holiday, they received a frustrating piece of news. After a grueling 15-month regulatory tug-of-war, Adobe's $20 billion acquisition of Figma fell through due to concerns from regulators about potential monopolization.

After the news broke, co-founder and CEO Dylan Field pressed the reset button for the startup aimed at becoming the "Google Docs of design." Figma lowered its internal valuation to just $10 billion and offered severance pay equivalent to three months' salary to employees who voluntarily left. Out of the company's 1,300 employees, only about 4% accepted the offer.

Insiders and investors stated that this move is aimed at stabilizing the company and preparing for its long-term future as an independent startup. "The ultimate result of this is that a large group of highly motivated employees has been left, who are fully dedicated to their work and tirelessly striving to launch new products," said Mamoon Hamid, a partner at the venture capital firm Kleiner Perkins, which is an investor in Figma.

In the past 18 months, Field's bet has paid off.

On Thursday, Figma and its investors plan to raise $1.2 billion through a public offering, with a fully diluted valuation (including unexercised options and other equity awards) exceeding $19 billion, making it likely to enter the top five IPOs in the tech industry this year. At the close of its first trading day, Figma's stock price was reported at $115.50 per share, more than doubling from the $33 issue price. Phil Fortier's wealth thus rose to $6.4 billion, and co-founder Evan Wallace also became a billionaire, with an estimated net worth of $3.1 billion.

One of the biggest winners of this listing is Field himself. Based on Thursday's IPO issue price, his net worth is estimated at $1.8 billion, but this may just be the first chapter of his wealth story.

According to the compensation plan awarded to him for 2021 and 2025, if this 33-year-old CEO continues to stay at Figma and the company's stock price rises to $130 (four times the issue price), then over the next ten years he has the opportunity to unlock an additional $1.3 billion (pre-tax, based on the current issue price) in shares—at that time, Adobe had offered him a similar retention plan.

On the day of the listing, the potential value of these restricted stocks had more than doubled. This compensation structure reflects a trend—companies are beginning to adopt aggressive long-term incentive plans, similar to Elon Musk's $56 billion stock incentive received at Tesla. However, a court in Delaware announced the plan invalid in January 2024, citing that Musk had too much influence over the board and that the plan's formulation process was unfair (Musk has appealed).

Although Figma has gone public, Field still has significant control over the startup he co-founded in 2013.

The IPO terms grant Field voting rights over the shares held by co-founder and Brown University alumnus Evan Wallace (valued at nearly $900 million at the issue price, reaching $3.1 billion at the close of that day). Field and Wallace will hold 99% of the company's Class B shares, with voting rights 15 times that of the Class A shares held by other investors. Overall, this gives Field, who was named in the Forbes 30 Under 30 list, control over approximately 74% of the voting rights in the company (including nearly 26% of the voting rights linked to the shares held by Wallace).

According to Axios, Wallace donated one-third of his shares in June to the Marin Community Foundation, a nonprofit dedicated to addressing homelessness; without this move, his net worth would be higher. Wallace previously served as the Chief Technology Officer of Figma and left the company in 2021. Field, Wallace, and Figma declined to comment.

After the $20 billion acquisition deal with Adobe fell through in 2023, this listing allowed Figma to make a strong comeback.

Adobe CEO Shantanu Narayen stated that the acquisition of Figma was "transformational" for the company that launched software such as Photoshop, Premiere Pro, and Indesign.

However, Adobe's investors are opposed to the $20 billion offer — a figure that is double the last valuation of the startup and about 50 times its $400 million revenue. In addition, antitrust regulators in the U.S., U.K., and Europe have also expressed concerns about the deal, not to mention the fans of Figma — many of whom have long abandoned the expensive Adobe tools.

The acquisition was first announced in September 2022, but ultimately fell through in late December 2023 after a warning from the UK antitrust regulator that the deal could reduce competition in the design software sector. After the deal was canceled, Adobe had to pay Figma a $1 billion "breakup fee," but Figma and its co-founders still needed to initiate a painful reset.

"It is indeed difficult to give up plans like a merger, but Dylan assessed the situation and then said, 'It is what it is, this is the new plan, let's move forward.'" John Lilly, a partner at Greylock, a venture capital firm and investor in Figma, said. "Although you may offer compensation, it will always be a bit unsettling to let your employees go, but Dylan is not one to hesitate, and in any case, this is indeed beneficial for the company."

While the founders were busy negotiating with Adobe and regulators on both sides of the Atlantic, the Figma team was also not idle. In early summer 2023, the company launched a tool to help developers convert designs into code, and subsequently released a series of new design and artificial intelligence tools last year.

This significantly improved Figma's performance – since the announcement of Adobe's acquisition deal, the company's revenue has nearly doubled. Last year, Figma's revenue was $749 million, and it is accelerating growth – sales in the first quarter of 2025 were $228 million, a 46% increase compared to the same period last year. Nevertheless, Figma has not yet achieved profitability. Last year, the company recorded a loss of $732 million, primarily due to $889 million in stock awards given to employees.

Figma still has a passionate following, and this year the company's annual Config conference held in San Francisco and London attracted thousands of attendees, with Field being a highly sought-after keynote speaker.

In 2012, he received the Thiel Fellowship, dropped out of Brown University with a major in Computer Science, and together with his alumnus Wallace, attempted several business ideas, such as drone software and emoji generators, before focusing on Adobe's Photoshop editing tools. The two spent several years launching the browser-based canvas beta version of Figma, but after its launch in 2015, it quickly gained popularity among designers and insiders from large tech companies like Microsoft. This also allowed Figma to reach a valuation of $10 billion just six years after its first product was launched, becoming one of the most watched startups in Silicon Valley.

This IPO also brought huge returns to some of Figma's venture capital supporters. Based on the issue price, the three top venture capital firms, Index, Greylock, and KPCB, currently hold shares worth nearly $6 billion, and if calculated based on Thursday's closing price, that number would be even higher.

In Figma's S-1 filing, Index is listed as the largest shareholder. Based on the IPO price, its stake is valued at approximately $2.1 billion. When Field was 19, Index partner Danny Rimer, who is on the Forbes Midas List of the world's best venture capitalists, invested in Figma's seed round.

Sequoia Capital and Silicon Valley wealth management firm Iconiq are also big winners in this IPO.

The IPO activity has been quiet for a long time, and Figma's IPO may open the door for more companies to go public. Before this, several companies such as Coreweave (valued at $23 billion) and Chime ($12 billion) have had their IPOs, along with a series of acquisition transactions, which have somewhat broken the rare and painful "exit drought" experienced by venture capital firms.

Some of Figma's major supporters are expected to receive substantial returns this year—and it's not just Figma that will bear fruit. Index will also benefit from several other transactions, including Google's acquisition of Wiz for $32 billion, Meta's acquisition of Scale AI for $14 billion, and an equity acquisition deal involving the $5 billion Turkish game developer Dream. Chip manufacturer Ambiq, backed by Kleiner Perkins, went public on the New York Stock Exchange on July 30, and in addition, Google acquired the management team of the "ambient programming" startup Windsurf for $2.4 billion.

Some of these transactions are driven by the artificial intelligence boom, which poses a threat to Figma. Startups like Lovable, Replit, and StackBlitz have raised significant funding and seen revenue surges. They leverage artificial intelligence not only to convert simple written instructions into prototypes and sketches that Figma excels at creating but also to generate fully functional websites and applications.