‍👉 Background: Figma was founded in 2012 and became famous for its cloud-based design software which replaced old-school file-sharing designs. It’s essentially like Google Docs but for designers with Pantone-colour-obsessions. Since its launch, Figma has grown to over 4 million users worldwide.

‍👉 What happened: In 2023, Adobe almost acquired Figma for $20 billion, but the deal was later abandoned due to the European regulators' concerns about competition. But late last week, Figma listed on the Nasdaq late and popped to a market cap of over $45 billion USD.

‍👉 What else: It initially listed at an issue price of $33 per share but by the end of Day 1, the shares closed at $115 USD per share... or more than 250% higher than its listing price. That gives it the biggest first-day pop for a US software IPO raising over $1 billion in at least 30 years.

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‍What's the key learning?

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‍💡Going public isn’t just about hype, it’s about managing supply, demand and setting a price based on what investors are willing to pay. In Figma’s case, the company offered 36.9 million shares to the public at a price of $33 per share, but the IPO was more than 40 times oversubscribed.

💡This kind of frenzy usually causes a “pop”, where the share price rockets on the first day of trading. And “pop” it did: Figma’s shares jumped 250%.

💡A similar thing happened with Airbnb in 2020 when its shares more than doubled on Day 1. Airbnb listed at $68 per share and finished the day at $146 per share. Interestingly, Airbnb's share price today is ~12% less than its share price after its first Day 1 on the Nasdaq. So, the real challenge for Figma is proving they’re worth the buzz… not just on debut day, but in the years that follow.