The Unicorn Valuation in the Design Industry

Figma—originally a startup focused on cloud-based collaborative design—has quietly transitioned into a prominent, independent public company since Adobe’s failed $20 billion acquisition attempt. Although regulators ultimately blocked the deal, this event inadvertently reaffirmed Figma’s market value and potential.

At the time of its IPO, Figma’s market cap soared past $60 billion and later corrected to approximately $40 billion today. High-growth SaaS businesses often experience notable price swings, which do not necessarily indicate underlying issues. On the contrary, Figma’s core product strengths, business model, and financial structure remain robust.

Figma’s Capabilities Go Beyond Design

Many people view Figma as just a design tool. In reality, it’s a comprehensive cloud platform tailored for digital product design, development, and collaboration. From its original UI design features to FigJam and Dev Mode, Figma is now expanding into presentation and website creation to grow its digital creation ecosystem. This horizontal integration lets users design prototypes, collaborate with engineers, and showcase documents all within a single platform. Users can customize workflows with thousands of available plugins. This deepens user engagement and increases the likelihood of converting free users to paid customers.

Outstanding Financials, but Valuation Demands Caution

As of the first quarter of 2025, Figma’s annualized revenue exceeded $900 million, with net income of $45 million. The company maintains an 88% gross margin and a 17% operating margin. Impressively, its Net Revenue Retention stands at 134%, reflecting significant upsell activity among existing customers. With a market cap that translates to about 200 times Forward Price-to-Earnings and a 44 times Forward Revenue Multiple, Figma’s valuation remains significantly higher than industry averages. Nevertheless, compared to industry giants like Adobe (Forward P/E of 15.9), Figma’s rapid growth and high retention rates may support its premium valuation.

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Conclusion

Figma stands out as a leader in design and collaboration. Its innovative products and strong market demand provide a solid foundation. While its current valuation may appear high, the company’s fast-growing revenue and high customer retention demonstrate substantial growth potential. Investors should closely monitor its valuation and market volatility to make sound investment decisions.