Figma Eyes Acquisitions, New Tools With $50 Million In Fresh Funding At $2 Billion Valuation

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Figma CEO Dylan Field has enjoyed watching his design software take off in bizarre ways in recent weeks. Less surprising: users turning Figma’s tools into virtual whiteboards and diagrams, or building fundraising pitch decks in-app. More eye-opening: a virtual city mapping many of San Francisco’s tech companies, templates and skins made for computer games Animal Crossing and Minecraft, and even simple games themselves.

“With COVID-19, the lines between work and home are getting very blurry,” says Field. Many Figma users, the cofounder says, are now logging in six or seven days a week. “We’re definitely at a bit of an acceleration point to the business right now.”

So it’ll come as no surprise to tech watchers that Figma has confirmed a new funding round from venture capital investors. First reported by Forbes earlier in April before the ink was dry, the Series D funding round of $50 million is led by Andreessen Horowitz and includes existing investors Index Ventures, Greylock, Kleiner Perkins, Sequoia and Founders Fund, as well as a group of angel investors and another new investor: Henry Ellenbogen, the former dealmaker at T. Rowe Price now with his own growth shop called Durable Capital. The funding values Figma at $2 billion.

According to Field, the funding came about as Figma looked to hire new recruits who questioned its valuation, previously $440 million. The deal was also opportunistic as Figma has been one of a cohort of work software businesses to benefit from the shift to work-from-home amid the coronavirus pandemic. “With COVID, you also want to have an insurance policy to be able to accelerate through all this even if things get really weird for a while,” Field says.

But Figma also plans to use the money to consider acquisitions and “acquihires,” in which a company will purchase a startup not for its intellectual property, but for its talent, as part of Figma’s next phase of expansion. Popular already with interface designer teams at tech companies like Airbnb, Slack and Twitter, Figma’s also used at media companies and big banks now, its CEO says, and will be pushing more into “visual communication”: Figma as collaborative meeting space for visual projects, not just the place where the visuals get made.

Founded in 2012 when Field dropped out of college to become a Thiel fellow and his cofounder and classmate, Evan Wallace, graduated from Brown, Figma was originally intended to function as a community for designers to meet and communicate, Field says now. Quickly, the duo decided that building a more revenue-friendly software tool should come first. They didn’t expect it would take until 2019 for their community features to publicly launch. (Both Field and Wallace have separately made the Forbes 30 Under 30 list for 2015 and 2017; Figma appeared on the Forbes Next Billion Dollar Startups list last July.) 

Figma competes in a design market that still features a public company incumbent, Adobe, and that has also seen the rise of popular startup rivals including InVision and Sketch. On the small business and individual user side to online design, there’s Canva, the Australia-based unicorn boasting more than 20 million users (many of whom don’t pay). Figma hopes to differentiate from all of them by providing more of an end-to-end product for design over time, one that naturally pulls ins marketers, salespeople and other non-designers to work on products within its app.

That inevitably means adding more features over time that will enable some of the use cases Figma’s been seeing in recent weeks. “We can never forget the core market we have today, that’s our core focus. But at the same time, we’re expanding out to the other use cases and trying to get to the point where everyone in a company can use Figma,” Field says.

At new investor Andreessen Horowitz, which backed Figma out of its late stage venture fund, general partner Peter Levine says he sees parallels between Figma and a company on whose board of directors he used to serve, GitHub. “We’re moving from what I would call the decade of code to the decade of design,” says Levine. “Products are going to be design led, as opposed to code led.”

With millions already in the bank, Figma’s funding round was opportunistic as a “COVID positive company.” But the company can now expand its go-to market sales team, says Levine, while looking to gobble up other tools and talent that might help it expand faster. Field says the company also made expanding its option pool to give more equity to employees a priority in the terms.

Figma is not without growing pains. Just yesterday, users flocked to Twitter as the Figma service temporarily crashed: “What if Figma crashed once a week to give us four day work schedules,” one quipped. A person close to Figma said the app was down for about 20 minutes and that the outage came from a front-end bug. “This was an isolated incident that has been resolved and we’ve taken steps to ensure it doesn’t happen again,” Figma’s vice president of engineering, Kris Rasmussen, said in a statement.

Within Figma, the hiccup has a silver lining: when people are posting memes to complain your service isn’t working, it means you matter. If Field’s vision is realized, the company will face only more scrutiny in the months to come. The goal is to make design possible for everyone through Figma,” he says. “And we really want to create a go-to place for everyone to create and communicate through design.”

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