Latest / Startup Stories with Fexingo: Conversations About Founders, Funding, and Building Companies from Zero / How Figma Conquered Design Collaboration
Transcript
- Lucas: So in 2022, Adobe announced it would buy Figma for twenty billion dollars. At the time, it was the largest acquisition of a private software company ever. And then... it fell apart. Regulators blocked it. And what's wild is that Figma is arguably stronger today than it was when the deal was announced. Luna: That twenty billion number still makes my brain hurt. I mean, Figma was founded in 2012, and for years it was just this tiny browser-based design tool that people laughed at. Lucas: Right. The conventional wisdom in 2012 was that design software had to live on your desktop. Photoshop, Sketch, Illustrator—they were all native apps. Figma's founder, Dylan Field, had this contrarian bet that the browser could handle real-time, vector-based design using WebGL. Everyone told him it was impossible. Luna: And yet, that browser bet is exactly what made Figma special. The multiplayer thing—being able to see someone else's cursor move in real time—that was the killer feature. Lucas: Exactly. Sketch had already dethroned Photoshop for UI design by the mid-2010s. But Sketch was still a Mac-only app, and collaboration meant exporting files and emailing them around. Figma's big insight was that if you put the design in the cloud from day one, you could build a whole new workflow around it. Luna: And they didn't charge for it at first either, right? I remember signing up for free in like 2016. Lucas: Yeah, Figma launched with a generous free tier. Individual designers could use it for free forever. The idea was to get it into as many hands as possible—especially students and freelancers—and then sell to companies once teams adopted it. By 2020, they had over four million users, and the paid conversion was incredibly strong. Luna: So the acquisition made strategic sense for Adobe. They were losing mindshare to this upstart. But regulators saw it differently. Lucas: The EU and UK regulators blocked the deal in early 2024, arguing that combining Adobe's Creative Cloud with Figma would stifle competition in the design tools market. And honestly, the DoJ was probably going to block it too. So Adobe walked away—and had to pay Figma a billion dollar breakup fee. Luna: A billion dollars just to walk away. That's insane. Lucas: It is. But here's the thing—Figma didn't need that money. They had already raised over three hundred million dollars, and their revenue was growing at over eighty percent year-over-year. The company was on a rocket ship with or without Adobe. Luna: What's the latest on them now? I know they're still independent. Lucas: As of mid-2026, Figma is valued at around fifteen billion in secondary markets—not quite the twenty billion Adobe offered, but close. They've expanded beyond screen design into whiteboarding with FigJam, and they're making a push into developer tools. The strategic vision is to be the entire collaboration layer for product teams. Luna: So the failed acquisition might have been the best thing that ever happened to them. They got a billion dollars, massive media attention, and kept their independence. Lucas: And they proved that a company can say no to a massive exit and still thrive. That's a rare story in startups. Usually, when a twenty billion dollar offer comes along, founders take it. Dylan Field and his co-founder Evan Wallace were patient enough to see the bigger picture. Luna: Speaking of patience—how long did it take them to even launch? I recall Field saying he spent years just building the underlying technology. Lucas: Figma was founded in 2012, but the first public beta didn't come out until 2015. Three years of development before anyone outside the company could use it. Field has talked about how he almost ran out of money multiple times. At one point, they were down to their last few months of runway. Luna: And yet they didn't compromise on the technology. They bet everything on WebGL, which at the time was mostly used for browser games and 3D visualizations. Using it for a vector design tool was completely novel. Lucas: That technical bet is what enabled the multiplayer feature. Because the rendering was happening in the browser via WebGL, they could sync state across users in real time. Sketch would have had to rebuild its entire architecture from scratch to do the same thing. By the time Sketch tried to add cloud collaboration with Sketch for Teams, it was too late. Luna: Sketch actually tried to acquire Figma early on, didn't they? Lucas: They did. In 2015, Sketch offered to buy Figma for around a million dollars. Field turned it down. At the time, that might have seemed foolish. Now, it's one of the best decisions in startup history. Luna: So what's the lesson here? That you should bet on technology that enables a fundamentally different user experience, even if it takes years to build? Lucas: I think that's part of it. But the other lesson is about distribution. Figma didn't just have a better product—they had a better go to market motion. The free tier, the browser accessibility, the easy sharing with a link—it removed all friction from adoption. Designers didn't have to ask IT to install software. They could just send a URL. Luna: That url sharing feature alone probably killed Sketch. I remember the first time I opened a Figma link on my phone and could actually scroll through a design prototype. That was mind-blowing in 2017. Lucas: And that's the kind of thing that makes a product viral. Every time someone shared a Figma link, the recipient could view and interact with the design without signing up. That's a powerful acquisition loop. By the time Sketch launched web-based viewing, Figma already had millions of users. Luna: Alright, so we've covered the product, the technology, the business model. But what about the culture? Figma has this reputation for being a very design-led company internally. Lucas: Yeah, Field has said that Figma's internal culture mirrors its product: collaborative, transparent, and iterative. They use Figma to design Figma. Everything from the product roadmap to company-wide meetings is shared in Figma files. It's a sort of dogfooding at scale. Luna: If today was actually useful to you, the way these stay ad-free is listener support. Buy me a coffee dot com slash fexingo. Lucas: Yeah, it really does help. And we appreciate everyone who chips in. Luna: So back to Figma—one thing I find interesting is their approach to pricing. They didn't just give away the product; they structured it so that individuals get it free, but teams pay per editor. That creates a natural upgrade path. Lucas: Right, and the per-editor pricing is key because it aligns with value. If you're a team of ten designers, you pay for ten seats. But viewers—developers, product managers, stakeholders—are free. That encourages companies to bring more people into the design process, which makes Figma even more embedded. Luna: So the network effects are real. The more people who use it, the more valuable it becomes, and the harder it is to leave. Lucas: Exactly. And now they're extending that into the developer handoff. With Figma's developer mode, they're trying to replace tools like Zeplin and Avocode. If they can become the source of truth for both design and code, their moat gets even deeper. Luna: What's next for them? I've heard rumors about an IPO. Lucas: There have been whispers about a potential IPO in 2027 or 2028. Field has been noncommittal, but the company is generating significant revenue—reportedly over a billion dollars in annual recurring revenue as of early 2026. They have the scale to go public whenever they choose. Luna: So Figma is a rare case where a startup not only disrupted an established market but also survived a potential acquisition and came out stronger. I think that's a story worth revisiting in a few years. Lucas: Absolutely. For now, Figma stands as proof that betting on a new technology platform—in this case, the browser—and having the patience to build it right can create a generational company. And walking away from a twenty billion dollar exit might just be the smartest move they ever made.