The Hottest IPO of 2025 Lands Tomorrow

Figma’s upcoming IPO is one of the most eagerly anticipated tech debuts of the year. The collaborative design platform boasts explosive growth, elite customer retention, and even profitability – a rarity among recent unicorn listings. Investors are buzzing about its strong fundamentals and AI-powered vision, driving Figma’s valuation near the ~$20B mark once courted by Adobe.

The big question: Can Figma leverage AI to become the ultimate “prompt-to-table” web builder, or will generative AI eventually cannibalize its core business?

Let’s break it down…

Figma’s Challengers: Competitors and AI

Figma’s meteoric rise hasn’t gone unnoticed. Incumbents and upstarts alike are challenging its domain. Adobe XD (from the would-be acquirer) and even Microsoft’s design initiatives are vying for enterprise customers, while popular creative tools like Canva and Miro are pushing into adjacent collaborative design spaces.

However, the most profound threat – and opportunity – comes from AI-driven competition.

Generative AI lowers barriers to entry in design: new AI-native tools (e.g. Galileo AI, Uizard) can produce UI mockups or website code from a simple prompt. Design commoditization looms as real-time collaboration becomes table stakes and AI automates more creative work.

Figma’s S-1 openly flags AI as both an opportunity and a risk.

On one hand, Figma’s own AI features could expand its market by bringing more users and use-cases onto the platform. On the other, if AI allows smaller teams to do more with less, or alternative AI-powered platforms to flourish, Figma’s core seat-based licensing model could be undermined.

For example, if a single product manager using an AI assistant can generate decent app prototypes solo, a company might require fewer designer subscriptions. There’s also “seat fatigue” to consider: Figma has grown by selling more seats across roles (design, dev, product, marketing), but CFOs might push back on spending if AI boosts productivity per seat. Essentially, the same technological wave propelling Figma’s narrative has a flip side that could cap its long-term growth if Figma doesn’t continue to out-innovate.

We see 2 clear paths ahead for Figma…

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