It's been a little over a year since Adobe abandoned its plans to purchase web-based design tool Figma. Now, the smaller of the two app makers is bucking market uncertainty by filing for an IPO.
Figma announced Tuesday it had filed a confidential S-1 form with the US Securities and Exchange Commission, giving it the option to go public pending an SEC review. The move flies in the face of market uncertainty since the Trump administration took over in January and started implementing an unprecedented and haphazard tariff policy. Many Wall Street analysts are expecting the US economy to tip into recession this year as a result of the new taxes on imports.
Nonetheless, with a big buyout off the table, Figma's remaining option to give liquidity to early investors and employees is to take to the public markets, as CEO Dylan Field alluded to after the Adobe acquisition failed.
"There are two paths that venture-funded startups go down," Field said in February 2024. "You either get acquired or you go public. And we explored thoroughly the acquisition route."
The biz shared minimal details about its plans, saying in its announcement it hadn't arrived at a number of shares or an opening price, both of which will come after the US securities watchdog has a look at its books. A Figma spokesperson, likewise, told The Register that the company is now in a mandatory quiet period per SEC rules, and couldn't share any additional information about its plans.
Figma offers an online, collaborative vector design tool, and we're told that it's been expanding its suite of offerings to cover a broader range of product development in recent years, pushing the company to a claimed $12.5 billion valuation.
The outfit attracted the attention of design stalwart Adobe in 2022, which made an offer in September to buy the smaller company for $20 billion in cash and stock. That deal quickly attracted the attention of antitrust officials in both the US and UK, who expressed concern that the deal could harm competition.
Figma users also expressed trepidation over the possible merger due to Adobe's offering of a similar tool, XD, and concern that the Photoshop giant could simply fold Figma features into its own offering after the purchase.
Adobe caved to pressure and abandoned the bid in 2023 after realizing regulators would most likely block it.
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"Adobe and Figma strongly disagree with the recent regulatory findings, but we believe it is in our respective best interests to move forward independently," Adobe CEO Shantanu Narayen said of the decision at the time. Adobe was forced to pay a $1 billion termination fee for its trouble.
Ironically enough for Adobe, it's basically given up on XD, with the product in maintenance mode and Adobe having no plans to revive it following the acquisition failure. We've reached out to Adobe to learn if it has additional plans to buy a share of, or work with, Figma post-IPO, and didn't immediately hear back.®
