After Figma, What Are The Next Noticeable Names In The IPO Pipeline?

Figma's IPO  last Thursday, with a valuation as high as $19.3 billion, reignited market enthusiasm for IPOs among tech startups.  

Investors are now further analyzing the "Figma effect" to determine whether its IPO will encourage other startups to follow suit, thereby ending the current IPO slump in the tech industry. Meanwhile, the market is also watching to see who the next tech darling to lead the charge might be.  

Companies favored by the industry include Databricks, Klarna, Stripe, and SpaceX—firms valued at tens or even hundreds of billions of dollars that have long been key targets for investors. Another group consists of already highly valued startups, such as OpenAI, Anthropic, and xAI, which have ridden the wave of the AI boom.  

Following Figma's success, investors have reassessed their criteria for evaluating tech IPOs. Kyle Stanford, head of U.S. venture capital research at PitchBook, pointed out that Figma is profitable and boasts strong AI integration, but these traits are not necessarily prerequisites for a successful IPO.  

He noted that investors prefer companies with at least $200 million in revenue and high growth rates, with the market prioritizing positive free cash flow over mere profitability. Having an AI "story" is also very important, but if a company is growing extremely fast with high margins, AI is not a must-have.  

What Are Noticeable Names?  

Kirsten Green, founder and managing partner of Forerunner Ventures, said the market should revisit the idea that an IPO is like a "Series A round" for entering the public markets, which could inspire companies to consider going public, or even be eager to do so.  

Stanford noted that as of June 30 this year, only 18 venture-backed companies in the U.S. had gone public, partly due to policy uncertainty and the lingering effects of the overheated funding environment in 2021. Figma's IPO could break the deadlock, but progress this quarter remains slow.  

One investor revealed that he is now focusing on Canva, a design software company with fundamentals similar to Figma. Canva could be the biggest winner following Figma's success.  

Canva has raised approximately $589 million across 18 funding rounds, reaching a valuation of $32 billion—higher than Figma's at its IPO. Additionally, Canva's annual revenue stands at $3 billion, up 35% year-over-year, further proving the sustainability of its business.  

Others believe the fintech company Revolut has greater potential, with NuBank's post-IPO stock price rising about 13% earlier this year, providing a clearer path for the former.  

Venture capitalist Jason Shuman suggested waiting for another hot contender—chipmaker Cerebras, which delayed its IPO due to involvement from UAE capital but has now received approval from U.S. regulators. Another standout is defense tech company Anduril, though the nature of its business might keep it private for longer.  

However, some investors argue that Figma's success is also tied to market sentiment. The U.S. stock market is at an all-time high, fueling retail investor enthusiasm for newly listed companies. Some venture capitalists worry that many may be investing in Figma without understanding its background—or even boasting about it on social media—which is somewhat concerning.