Why Did Figma’s Shares Skyrocket 205% on Debut?

The market was taken aback by Figma's Wall Street debut, as shares surged 205% above their initial public offering (IPO) price. The design software company instantly became one of 2025’s biggest financial stories and left investors clamoring for answers.

From the moment trading began, excitement built rapidly. By the afternoon session, Figma’s stock soared from $33 to above $112 before trading was halted again due to intense volatility.

Unprecedented Investor Demand

Figma’s IPO drew immense demand, with the share offering more than 40 times oversubscribed. Most hopeful buyers walked away empty-handed, a rare outcome even for high-profile tech flotations. Market watchers saw the event as a signal of pent-up demand for top-tier growth companies.

Such overwhelming interest drove a surge in buying on the open market. Institutional and retail investors raced to snag shares, pushing prices far above initial estimates and rapidly inflating Figma’s market value.

Did you know?
Figma’s IPO was more than 40 times oversubscribed, leaving most prospective investors with no shares at all, one of the most competitive US tech listings of the past decade.

Benchmark Financial Metrics

Unlike many recent software IPOs, Figma arrived on the NYSE as a profitable, high-momentum business. Its Q1 revenue jumped 46% year over year to $228 million, and the firm posted a net profit that quarter despite a previous annual loss. With adjusted gross margins around 92%, Figma outperformed even industry leaders on core profitability.

This exceptional financial profile helped broaden its appeal beyond traditional tech-investing circles. Investors viewed Figma as an unusually robust growth story with a clear path to continued expansion.

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The Adobe Saga: Valuation Rewritten

Figma’s 2025 IPO also carried a dramatic backstory. Its $20 billion Adobe buyout collapsed in 2023 after regulators intervened, sending shock waves through the sector. Going public shortly after the failed Adobe buyout and exceeding that previous valuation by $45 billion within hours contributed to the positive narrative.

Founders, early investors like Sequoia Capital and Index Ventures, and CEO Dylan Field (whose holding neared $5 billion) all gained dramatically from the IPO. The failed Adobe merger and its headline $1 billion breakup fee haunted the market’s memory, crystallizing the sense of a comeback.

Market-Setting IPO Tactics

Figma’s bankers used an order-taking model similar to an auction, inviting investors to state exactly what quantity and price they’d pay. This fostered transparency, revealing true demand, and encouraged aggressive bidding. The approach amplified early price action and ensured a robust start.

Broader Signals for Tech IPOs

With the US tech IPO market largely dormant for nearly two years, Figma’s debut signaled renewed appetite for software and AI-driven firms. The use of AI features in Figma’s toolset fueled even higher expectations for continued innovation and growth.

The event’s scale also reignited hope among other late-stage tech unicorns. Whether this sparks a fresh wave of US tech IPOs may depend on whether Figma can sustain momentum in coming quarters.

Figma’s day-one story is a sign of market hunger for standout tech disruptors. With investors watching closely, the company’s next steps could help define what the next generation of public software giants will look like.