Having offered its shares at a price higher than previously increased price, the company was able to raise its valuation to 19.34 billion in the stock listing.
New tech IPOs that were listed recently have been well received by investors and have given good post-IPO performance, which has sparked optimism regarding the addition of new listings by high-growth and AI-oriented companies.
Having an IPO of Figma, Derek Hernandez, senior analyst, emerging technology at PitchBook, speaks of it in terms of a bellwether event in the tech industry with reference to the understanding of a private markets perspective.
Figma is a team design tool that is used to create websites, apps and other digital products and its client base includes streaming company Netflix (NFLX.O), opens new tab, travel company Airbnb (ABNB.O), opens new tab and learning language service Duolingo (DUOL.O), opens new tab.
Silicon valley venture capital giants Kleiner Perkins and Sequoia are some of its prominent backers.
At the time in 2022, “it was not clear looking at how Figma positioned itself around AI, and the capability to provide immensely better experiences to their customers with AI,” at least according to Andrew Reed, a board member of Figma and a partner at Sequoia Capital.
The first investment by Sequoia Capital in Figma occurred at a price per share value of 1.10 in Series C funding of the company. Figma has set its IPO price at 33 dollars a unit, meaning that Sequoia is likely to make good money on its approximately 150-million-dollar investment, according to the sources familiar with the situation.
Elsewhere, the wider markets hit record levels on Thursday due to the blockbuster earnings at Microsoft which gave investors conviction to keep believing in Big Techs big spending on artificial intelligence.
AI RACE
Software design companies are fast at work to build in generative-AI technology, which helps automate the creation of images, layout ideas and even code generation as businesses want to capture enterprise buyers, as well as creative workers.
In its IPO filing, Figma cited stiff competition, especially due to fast AI adoption, as one of its possible headwinds, threatening to lose market share.
