Company Profile
Founding
Figma (ticker: FIG) was founded in 2012 by Dylan Field and Evan Wallace while they were students at Brown University.
Adobe gave it a push
At the time, Adobe had just announced the discontinuation of Fireworks, the web design software it had acquired from Macromedia and strategically abandoned. “We felt like this was an opportunity,” Field later recalled in a podcast. In a 2012 interview, he was even more blunt: “Our goal was to enable anyone to create. We wanted to make a free web design tool that everyone could use.”
The origin of Figma
Back then, the design process relied heavily on desktop tools, making team collaboration inefficient. Design drafts were often emailed as “Draft_V2” files, resulting in a highly fragmented workflow.
Inspired by the collaborative nature of multiplayer online games and Google Docs and GitHub, the two founders sought to move the design process into the browser, leveraging WebGL for efficient rendering. After three years of product development, they ultimately launched Figma. It was the first browser-native design tool to combine web accessibility with desktop performance.
Initial Public Offering
The company went public on July 31, 2025, with a market capitalization of $56.3 billion at closing that day, representing a stock price increase of over 240% from its IPO price.
Figma’s Value
Fixed the long-standing pain point
Designers are ecstatic about being able to share files via links, eliminating the need to worry about version confusion and format compatibility issues. Furthermore, Figma runs on a cloud platform, providing the necessary computing infrastructure, so users don’t need a powerful GPU.
In September 2016, Figma finally opened its design editor to the public, and its real-time collaboration feature became its killer feature, which began to attract the world’s attention.
The turning point came in 2020 – the epidemic caused offices around the world to suddenly go dark, and Figma’s instant collaboration function went from “easy to use” to “must-have” overnight.
In June 2023, Figma launched Dev Mode at the Config conference, which can convert design drawings directly into source code. This killer feature drew cheers from more than 8,000 developers at the conference.
Company Competitiveness
Figma’s feature set focuses on user interface and user experience design, with an emphasis on real-time collaboration. The company’s early positioning was: “A technology startup enabling users to express their creativity online.”
Figma Make is a new tool based on the Anthropic Claude 3.7 Sonnet large model, which claims to allow designers to turn sketches into working prototypes in just a few words.
Product Evolution
Although some designers initially worried that exposing their processes might lead to deadline pressure and disrupt collaboration, as more teams adopted Figma, its real-time collaboration within the same file gradually demonstrated its advantages of faster production, unified resources, and standardized processes. It also solved the long-standing challenge of a “single version of truth” in the design process.
Today, the openness and accessibility promoted by Figma have become the industry default. This design-driven revolution in work practices continues to spread across teams, tools, geographies, and industries, profoundly changing the way software products are built and delivered.
As collaboration evolves, the Figma platform is expanding from a single design tool to a comprehensive product development system covering the entire process from conception to release. The platform, native to the browser, currently supports the entire workflow from ideation, visualization, build, to delivery, all underpinned by the AI component Figma Make.
Supporting “From Idea to Product”
Figma is more than just an interface design tool; its true purpose is to help teams transform ideas into software. While Figma’s user community has driven its evolution in various ways, its core remains centered around the core principle of “how to transform ideas into products.”
The Figma platform fully supports the following four key phases. The following flowchart illustrates how Figma builds its platform to support the complete path from idea to product:
- Ideate and Align: Team members brainstorm and align around a specific issue or goal, collaboratively exploring feasible solutions.
- Visualize: Designers, product managers, and other collaborators visualize ideas at varying levels of fidelity, gradually forming the overall product experience structure.
- Build: Design and visualization results are converted into code, primarily by developers, and reach a shippable state.
- Ship: The product is officially released to users and continuously iterated and optimized based on market feedback, forming a closed loop of learning and innovation.
Operations
Adobe’s failed acquisition attempt
Adobe initially viewed Figma as a threat and, after launching its competing product, XD, attempted to eliminate competition through acquisitions twice. However, the $20 billion acquisition fell through due to antitrust regulations.
Because it is a direct competitor to Adobe XD, which began to lose market share to Figma in 2021, on September 15, 2022, the American software company Adobe announced that it would acquire Figma for approximately $20 billion in cash and stock, its largest acquisition to date.
Members of the design community expressed concerns about the product’s future, including potential or forced integration with Adobe’s Creative Cloud, or being forced to adopt a business model that would be unfavorable compared to Figma’s current model.
On December 18, 2023, Adobe and Figma announced they would abandon the merger after UK regulators ruled that the deal “could stifle innovation and cause Figma and other digital tool companies to become uncompetitive and unable to provide customers with new and better products.”
Please see my post of “Why Adobe’s Figma Acquisition Caused Upheaval” of Adobe’s acquisition attempt.
Competitors
- Sketch
- Adobe XD
- Axure RP
- Pixso
Capital Market Performance
Stock Price Performance
The largest US IPO since 2025, with a 240% increase on its first day of trading. The market capitalization is now approaching $70 billion.
Reasons for the Stock Price Surge
Figma was one of the few companies to be profitable at IPO, and riding the wave of artificial intelligence (AI)—Figma’s IPO prospectus mentioned AI over 100 times—combined with the US stock market being at the peak of a bull market, all of which contributed to its high popularity.
How has Adobe’s stock price performed?
Adobe, which originally wanted to acquire Figma, was hit by the impact of artificial intelligence on its main products, causing the market to doubt the company’s future prospects. Its own artificial intelligence integration was also lackluster, and it was regarded as a representative of software companies hit hard by artificial intelligence. Its stock price fell 50% in two years from its high in November 2021, and no longer enjoyed the previous price-to-earnings ratio valuation of 70.
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