Figma confirms an undisclosed funding round that increases its value to $12.5 billion

Collaborative design software startup Figma Inc. confirmed today that it has closed a significant funding round led by a group of investors including Coatue Management, Alkeon Capital Management and General Catalyst Partners. The size of the deal was not disclosed, but Bloomberg reported that it values ​​the company at $12.5 billion.

The report cites people familiar with the matter as saying Figma had annual recurring revenue of over $700 million in fiscal 2023. The person said that figure is expected to rise to over $1 billion this year. In late 2022, a filing reported that Figma’s ARR was just $400 million.

Founded in 2012 and led by its CEO Dylan Field, Figma provides a cloud-based platform for designing user interfaces for websites and applications. Its collaborative tools allow multiple stakeholders to work together and edit a user interface simultaneously. The platform also allows users to collect feedback from other project stakeholders, such as software developers.

In addition, Figma offers a number of no-code tools that can simplify the design of complex UI components without having to write software code to create them.

The company became a takeover target for Adobe Inc., which made a $20 billion offer in September 2022. Figma shareholders approved the deal, but after months of wrangling with regulators, the two companies ultimately called off the acquisition, saying there was “no clear path to obtain the necessary regulatory approval” to go through.

Since the acquisition was canceled, Figma has doubled down on its artificial intelligence efforts, introducing features such as an AI-powered visual storytelling tool called Figma Slides.

The launch of the AI ​​tools, however, has come with some setbacks. Earlier this month, the company had to shut down a new tool called “Make Design,” which uses generative AI to create full-fledged application UIs for users based on natural language commands. When the tool was introduced, Figma said all the user had to do was sketch out what kind of app they wanted to build, such as a “weather app,” and Make Design would get to work immediately.

Unfortunately, Figma seems to be struggling to produce original work. In a blog post, software executive Andy Allen revealed that every time he asked Make Design to design a weather app from scratch, it simply regurgitated a slightly modified clone of Apple Inc.’s standard weather app. Figma responded by “temporarily disabling” the Make Design tool, and it hasn’t returned yet.

In a statement to Bloomberg, Figma acknowledged that it had completed a “secondary stock sale,” but declined to name all investors involved or confirm the amount of revenue. Secondary stock sales are also known as tender offers and can involve both current and former employees, as well as other shareholders.

Confirmed investors in the new round include SurgoCap Partners, Atlassian Corp., Fidelity Management & Research Co., Franklin Templeton’s Franklin Venture Partners and Iconiq, Sequoia Capital, Thrive Capital, Greenoaks Capital Partners, Durable Capital Partners, Andreessen Horowitz, Kleiner Perkins, Apple Inc. CEO Eddy Cue, Goanna Capital and XN, according to the Figma spokesperson.

Image: Figma