Figma just had a very successful IPO. We read through their prospectus. Learnings about their business and how they do SaaS are below.
What they do. “We launched Figma Design in 2015 using powerful WebGL technology to bring design into the browser for the first time. Figma Design made it easier and more efficient for designers to work alongside developers, PMs, researchers, and other participants in the product development process.”
8 years after launch, a new product caught fire. “Then, in 2023, building on years of bringing design and code closer together, we launched Dev Mode, a product tailored for developers, who, during the three months ended March 31, 2025, made up approximately 30% of our monthly active users. In 2024, we introduced Figma Slides to give teams a new tool to drive strategy and alignment along the way.”
They pump out product. “In 2024 alone, we shipped 180 new features and updates. Our customers recognize the benefits of the interconnectivity across our platform, with 76% of our customers using two or more products during the three months ended March 31, 2025.”
Pricing was simple, initially. “In Figma’s early days, our customers could choose from one of two plans: Starter (our free plan) and Professional (our paid plan).”
But they evolved to adapt to customers using the product more deeply. “As teams grew with Figma, companies started to standardize their systems and processes on our platform. This was necessary because many of these companies were managing multiple brands and teams across time zones. Many customers began viewing Figma as their system of record for design and product development, and needed more features and functionality to support not only their work, but also to adhere to security and compliance standards. Based on feedback from our customers, in 2018, we introduced our Organization plan. Our Organization plan allows for unlimited teams, shared libraries, and centralized admin tools. While these features were sufficient for many of our customers, others needed more. As a result, in 2022, we launched our Enterprise plan, with features like custom team workspaces, advanced security, and private APIs to meet the needs of our largest customers. While approximately 70% of our revenue for each of the year ended December 31, 2024 and the three months ended March 31, 2025, came from customers on Organization and Enterprise plans, we continue to build features and products designed to create value for all of our customers.”
International presence. “The vast majority of our users have always been outside the United States, and today we have users in over 150 countries. Customers working in Figma on University Avenue in Palo Alto use the same product as those building the next big thing in a Bangalore coffee shop. During the three months ended March 31, 2025, approximately 85% of our monthly active users were based outside of the United States, and 53% of our revenue came from non-U.S. markets during the same period”
They just achieved profitability. “Our revenue was $749.0 million for the year ended December 31, 2024, representing 48% year-over-year growth as compared to the year ended December 31, 2023. For the years ended December 31, 2023 and 2024, we had net income of $737.8 million and net loss of $732.1 million, respectively, and for the three months ended March 31, 2024 and 2025, we had net income of $13.5 million and $44.9 million.” Note that the 2024 loss was largely due to stock option grants.
They didn’t charge for the first 2 years. “When we first launched Figma in 2015, early adopters realized the benefit of using a highly performant, browser-based design tool that was also easy-to-use. Adoption grew organically as designers advocated for Figma within their organizations and others saw the natural benefits of bringing teams together into the design process. Users started inviting their collaborators to join them in Figma, and as we began charging for Figma in 2017, this drove conversions from free to paid plans”
First sales rep came only when the GTM became more enterprise. “We hired our first sales rep in 2018, the same year we launched our Organization plan. As we have introduced tailored plans designed to meet the needs of larger companies. As of March 31, 2025, we had more than 40 Paid Customers with more than $1 million of ARR”
They changed pricing in response only to user use. “As adoption continued to spread quickly within companies, customers told us that managing licenses, account details, and other administrative functions became increasingly time-consuming and complex. we made our first-ever changes to our pricing and packaging of our plans in March 2025. Instead of buying individual products, customers can now buy multi-product seats tailored to the needs of different users”
Seat upgrades are proactively approved. “We have also made additional modifications to how we sell, price, and package our products. First, we moved away from user-driven upgrades. Prior to March 2025, seat upgrades were driven by users by default. Administrators reviewed these new seats retroactively to provision the seats. In the new model, any seat upgrade needs to be approved by an administrator before the license is provisioned.”
They have a freemium-ish strategy. “Converting new and existing users into paying customers is a key driver of our growth strategy. We have a range of different plans for all types of users, including a free Starter plan. We also have a free offering for students and educators. We have rapidly grown our user base and during the three months ended March 31, 2025, we had over 13 million monthly active users5, comprised of both free users and paying users. Our Starter plan makes it easy for anyone to quickly get started with Figma and experience the benefits of our platform. More advanced functionality is available on our paid plans, which are designed to meet the specific and sometimes complex needs of teams.”
Retention is excellent. “Our Net Dollar Retention Rate of 132% as of March 31, 2025 underscores the natural expansion of our platform as well as adoption of new products with our customers. The chart below illustrates the ARR of each cohort over the periods presented, with each cohort representing Paid Customers who made their first purchase from us in a given fiscal year. For example, the 2020 cohort represents all Paid Customers that purchased their first subscription from us during 2020. The compound annual growth rate of ARR for our 2020 cohort, 2021 cohort, and 2022 cohort from the fiscal year of the cohort through March 31, 2025 is 46%, 31%, and 22%, respectively. As of March 31, 2025, our Gross Retention Rate was 96%”
Adobe almost bought them. “On December 17, 2023, we mutually agreed with Adobe to terminate the Merger Agreement based on the joint assessment that there was no clear path to obtain the required regulatory approvals for the transaction to close (the “Abandoned Merger with Adobe”). On December 20, 2023, we received a $1.0 billion termination fee per the terms of the Merger Agreement from Adobe which was recorded within other income”
The CEO is the Founder. His name is Dylan Field, he’s only 33, and he owned 12% of the business prior to IPO.
Thank you for your readership. See more blogs and SaaS data at blossomstreetventures.com. Email the author at sammy@blossomstreetventures.com.