Technology IPO welcomes recovery! Design software giant Figma (FIG.US) successfully raised $1.2 billion, landing on the NYSE tonight.

On Wednesday, design software company Figma (FIG.US) announced the successful completion of its initial public offering (IPO) in the United States, raising $1.22 billion. This marks a resurgence in investor enthusiasm for IPOs of pure tech companies after years of a cold spell. Based in San Francisco, the company and some of its existing shareholders issued 36.9 million shares at a price of $33 per share, which was higher than the previously set target range of $30 to $32. Earlier this week, the company had increased the price range, indicating strong market demand. After a long freeze in the US capital markets, investor interest in high-growth tech companies is rebounding, which will encourage more companies to seek IPOs. Figma's IPO also comes at a time when its $20 billion acquisition deal with Adobe (ADBE.US) was terminated in December 2023 due to antitrust regulatory issues. Currently, several venture-backed startups particularly in software and artificial intelligence (AI) are testing public market responses. These companies are betting that improved valuations and lower interest rates will inject more momentum into the IPO market in the second half of the year. This issuance is seen as a litmus test of investor confidence and could pave the way for other venture-backed tech startups awaiting their IPOs. Sam Kerr, Head of Equity Capital Markets at Mergermarket, said, "The success of IPOs like CoreWeave (CRWV.US) and Circle (CRCL.US) shows that tech companies are facing a favorable IPO environment, possibly indicating that the market, which has been stagnant since early 2022, is restarting." Based on fully diluted share capital, Figma's IPO values the company at approximately $19.34 billion, a significant increase from the $12.5 billion valuation achieved through a tender offer last year which allowed employees and early investors to cash out part of their equity. IPO Enthusiasm The company, which provides real-time collaborative design tools for digital products, is currently heavily investing in integrating AI technology with its platform. Derek Hernandez, Senior Analyst at PitchBook's Emerging Technology, noted, "Figma's strong performance post-IPO could spark market enthusiasm for IPOs of tech unicorns with disruptive technologies like Stripe and Databricks in the remainder of the year." Backed by top Silicon Valley venture capital firms including Kleiner Perkins, Sequoia Capital, and others, Figma's IPO utilized an auction-style pricing mechanism, requiring investors to specify the amount and price they are willing to subscribe for. The company's stock will start trading on the New York Stock Exchange on Thursday under the ticker symbol "FIG." Morgan Stanley, Goldman Sachs Group, Inc., Allen & Company, and JPMorgan Chase served as the lead underwriters for this IPO.