Pop idol

The surest sign that a company has priced its flotation well is that nobody talks about the first day of trading. By that standard Figma, a maker of design software, made a mess of it. By every other standard it had a triumph. On 31 July its shares, sold the night before at $33 each,^{1Renaissance CapitalFigma flies up 250% in largest-ever pop for a billion-dollar IPO31 Jul 2025} opened on the New York Stock Exchange at $85 and closed at $115.50, up 250%.^{1Renaissance CapitalFigma flies up 250% in largest-ever pop for a billion-dollar IPO31 Jul 2025,2IPOScoopThe IPO Buzz: Figma (FIG) Opens at $85 and Ends at $115.50 in NYSE Debut31 Jul 2025} Renaissance Capital, an IPO research firm, calls it the biggest first-day pop ever for an offering that raised $1bn or more. The previous holder of that title was Circle, a stablecoin issuer, whose shares rose 168% in June.^{1Renaissance CapitalFigma flies up 250% in largest-ever pop for a billion-dollar IPO31 Jul 2025}

The reasons for investors’ enthusiasm are not hard to find. Figma’s prospectus shows revenue of $749.0m in 2024, up 48% on the year before, and $228.2m in the first quarter of 2025, up 46%.^{3SEC EDGARFigma, Inc. Form S-1 registration statement1 Jul 2025} More than 13m people use its products each month, two-thirds of them not designers.^{3SEC EDGARFigma, Inc. Form S-1 registration statement1 Jul 2025} Few software firms that size still grow that quickly. The company also has a story. In 2022 Adobe agreed to buy it. In December 2023 the two abandoned the deal, seeing “no clear path” past regulators in Brussels and London, and Adobe paid Figma a termination fee.^{4AdobeAdobe and Figma Mutually Agree to Terminate Merger Agreement18 Dec 2023}

After the drought. Number of American IPOs priced

	IPOs
2021	397
2022	71
2023	108
2024	150
2Q 2025	44

Source: Renaissance Capital annual US IPO market reviews⁵⁶⁷⁸⁹

The debut also marks a turn in a market that has been all but shut. In 2021, at the top of the cheap-money boom, 397 companies listed in America.^{5Renaissance CapitalRenaissance Capital's 2021 US IPO Market Review3 Jan 2022} In 2022, as the Federal Reserve raised interest rates, just 71 raised $7.7bn between them, the slowest year by proceeds in Renaissance’s review.^{6Renaissance CapitalRenaissance Capital's 2022 US IPO Market Review3 Jan 2023} Recovery has been slow: 108 IPOs in 2023^{7Renaissance CapitalRenaissance Capital's 2023 US IPO Market Review2 Jan 2024} and 150 in 2024.^{8Renaissance CapitalRenaissance Capital's 2024 US IPO Market Review2 Jan 2025} This year began with a tariff-induced sell-off in April, yet the second quarter still brought 44 listings raising $7.0bn.^{9Renaissance CapitalRenaissance Capital's 2Q 2025 US IPO Market Review1 Jul 2025} Figma, before trading began, was the largest venture-backed tech IPO by deal size since 2021.^{1Renaissance CapitalFigma flies up 250% in largest-ever pop for a billion-dollar IPO31 Jul 2025}

For the venture industry this matters a great deal. Funds raised in 2020 and 2021 hold stakes in hundreds of companies valued in a different era. Their investors, the pension funds and endowments, want cash back before they commit more. A working IPO market gives them a way out. It also sets prices. A public market willing to pay up for a fast-growing software firm makes a lot of private valuations look less fanciful.

There is a less cheerful reading. The pop is a measure of what Figma and its selling shareholders left behind. They sold 36.94m shares for $1.22bn.^{2IPOScoopThe IPO Buzz: Figma (FIG) Opens at $85 and Ends at $115.50 in NYSE Debut31 Jul 2025} At the closing price those shares were worth some $4.3bn, so roughly $3bn went to the investors lucky enough to get an allocation, not to the company or its early backers. Underwriters will say that they raised the price range twice, from $25-28 to $30-32 and finally to $33,^{1Renaissance CapitalFigma flies up 250% in largest-ever pop for a billion-dollar IPO31 Jul 2025} and that a cautious price after three lean years was prudent. Perhaps. But a pop this large is a sign that the process for discovering prices is not working. It is also a reminder that a frothy first day often fades.

Neither reading should be overdone. One spectacular day does not make a recovery, and two large pops in two months suggest demand outstripping a thin supply of good companies more than mania. The right lesson for founders sitting on the sidelines is that public investors will pay handsomely for fast, durable growth, which Figma has. The lesson for bankers is that they should price the next one closer to what it is worth. Firms considering a direct listing or an auction, which let the market set the price from the start, have a fresh argument for doing so.

The window is open again. The challenge now is to stop throwing money out of it.