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Figma Breaks the Dam
The IPO window hasn’t exactly flung open, but last week, one company cracked it.
Figma officially went public, and the response was loud. The stock more than doubled on day one, capping off a journey that included a $20B failed acquisition, a regulatory battle, and a whole lot of “is the IPO market dead?” hand-wringing.
It’s not. At least, not if you’re Figma.
From Acquisition Target to Market Darling
Back in 2021, Figma was already a darling in design and product circles. They raised a $200M Series E at a $10B valuation. Peak pandemic exuberance, sure, but even then the fundamentals looked strong. In 2022, Adobe came calling with a wild $20B offer. The tech world gasped. Regulators blinked. And a year and a half later, the deal got scrapped.
Figma walked away with a reported $1B breakup fee and no exit. For a lot of startups, that would’ve been a hard reset. For Figma, it was a reset, but in the best way.
Instead of chasing another M&A deal or shelving plans, they focused on building. The company grew ARR to ~$912M, kept burn in check, and was cash flow positive by the time the S-1 dropped. A clean story, with real numbers behind it.
The IPO Itself
Figma priced its IPO at $33/share, already at a healthy ~20x forward revenue multiple, but the demand of an over 40x oversubscribed IPO and the subsequent 250% pop on day one seem to bode for some argument that underwriters missed the mark here a bit. Regardless, its an extremely strong exit for the company, and it points to the market having a good appetite for a new listing with strong financials. Below, we broke down some info on how the price for the stock has evolved from fundraising, the Adobe deal, and finally the IPO. My colleague wrote a great article on return profiles for different investors in the company, so feel free to check it out here if you’re interested!
Why This Matters
Figma’s IPO isn’t just about one company doing well. It’s a signal.
The last two years have been brutal for late-stage startups. Valuations have reset. The IPO window looked jammed shut. Everyone’s been waiting for a sign that the best companies could still get out. This might be it.
And if you're a company like Databricks, Canva, Rippling, or any of the other late-stage names sitting on multi-billion dollar cap tables, this should feel like a green light. Maybe not full-speed ahead, but enough to start planning in public again.
Canva in particular is probably paying close attention. Design-led, global user base, strong brand equity, if Figma can pull this off, Canva might not be far behind.
Figma didn’t wait for perfect timing. They just kept building. And now they’re the first real breakout IPO of this cycle. The dam didn’t break all the way, but the cracks are starting to show.
Tips of the trade
A section where we provide helpful tips for anyone with stock options or shares at private companies.
Tender Offer FOMO
After Adobe’s $20B acquisition fell through and over a year before their IPO, Figma held a tender offer in May 2024 that valued the company at $12.5B. A tender offer is simply an opportunity for employees to sell their shares back to the company or its investor at a certain price.
Some employees took liquidity then, and might be feeling the sting now with shares trading above $28B.
But that doesn’t mean they made a mistake.
Selling pre-IPO is about de-risking, not timing the top. With tenders, you get liquidity when it’s available, not when the market decides it’s ready. In Figma’s case, there were good reasons to cash out: regulatory drama, market uncertainty, and no clear IPO date in sight. Not to mention being tantalized for over a year with the idea of a nice payday, courtesy of Adobe.
Sure, holding would have doubled your upside on paper. But post-IPO shares come with a six-month lockup, and anything can happen before those shares are liquid. Hindsight is 20/20. While Figma is a best-in-class success story, many tender offers or pre-IPO sales end up being the highest price you will ever see, and others do not. It can go either way.
Those who sold in the tender have had over a year to reinvest that capital. Figma’s run is a tough benchmark to beat, but they could still close the gap.
Smart employees often sell a portion in tenders. They take chips off the table while still holding a meaningful stake. It is not all or nothing. It is a hedge.
Funding your option exercise can be expensive and a require a large capital outlay. Feel free to reach out to us to discuss your options for partnering with ESO to exercise your options risk-free.
The ESO Fund does not provide legal, financial, or tax advice.
July's Top Ten:
We spent the whole intro talking about it, so goes without saying that the Figma IPO and its performance was the top story of the month! We broke it down pretty fully up earlier in the newsletter so you can find our commentary on it there.
Anthropic is reportedly in talks with investors for a $3–5 billion raise that would value the company at ~$170 billion as its revenue trajectory surges. Iconiq Capital is said to be leading the round. The news comes of the heels of reports that Anthropic’s annual revenue reportedly hit $4 billion in mid‑2025, fueled by enterprise demand for Claude AI.
Groq is in talks for a new $600 million round valuing it at ~$6 billion, though there are some questions about the company’s projections revenue. Groq significantly cut its 2025 revenue forecast to just over $500M down from a prior target of over $2B.
A little acquisition drama for the month, OpenAI’s $3B acquisition of Windsurf collapsed after investor pushback, most notably from Microsoft, over IP rights. Google swiftly hired Windsurf’s CEO and team, licensing the core tech for $2.4B, while the rest of the company was quietly acquired by Cognition Labs in a stock deal.
SpaceX has committed $2 billion to Elon Musk’s AI startup xAI as part of a larger $5 billion round that values the AI entity (post-merger with X) at roughly $113B, deepening inter-venture synergies.
Figure, the blockchain-based lending and HELOC platform, quietly submitted its S-1 and is targeting a potential $5–10 billion IPO in late 2025, while continuing to evaluate market timing.
Ramp is circling a new $350 million raise that would value the expense management unicorn at $21 billion, marking a 30% jump from its $16B valuation this past June.
Open‑source AI inference platform Fireworks AI is in discussions for funding that values it at ~$4 billion. Lightspeed and Index Ventures are leading discussions, and if they achieved that valuation, it would be a sevenfold increase.
AI chip maker Cerebras, once sibling to the IPO pipeline, is reportedly postponing its public offering to pursue extended private funding worth $1 billion.
Cryptocurrency exchange Kraken is reportedly in talks to raise $500 million in funding at a $15 billion valuation as it positions itself for eventual IPO readiness and expansion across regulated markets.
Why It Matters:
July’s stories are showing that AI fundraising isn’t slowing down, and we are also seeing the return of crypto. The feeling of frothiness in the market right now is running tangentially with some economic uncertainty, so we will be monitoring how the next month shakes out closely.
Startups that are hiring!
Open positions are per the company's website.
About ESO Fund
ESO Fund empowers startup employees to turn their stock options into reality. Since our inception in 2012, we've been dedicated to providing risk-free funding for the exercise of stock options, ensuring that individuals can seize the opportunities embedded in their equity.
Our mission is simple: to make equity compensation accessible and understandable. Through our innovative solutions, we've assisted countless individuals at 650+ companies in realizing the full value of their stock options, contributing to the success stories of numerous startup employees.
For more information on ESO Fund and how we can help fund your option exercise, please refer to our website at www.esofund.com!