Just imagine you’re building a heavyweight website or any type of app to provide services or sell products to your customers. Whenever you are trying to build these types of apps or websites, you have to imagine or design something to follow. To build something, you need a design, right? This is called UI/UX design. You will not be able to design those with Canva. You need another software. And the very prominent, famous, and most usable software is Figma.
Yes, I am talking about this new innovation in UI/UX design called Figma. An outstanding app where you can easily create any website or software interface. Nowadays, if you Google or search on Fiverr and Upwork, which are freelance or remote marketplaces, you can see thousands of companies hiring for this type of role, i.e., UI/UX designer. Why is Figma so popular among these designers? Let me tell you the whole story…
Founding Story:
Dylan Field is the founder of Figma. Field was very attentive since his childhood and also very passionate about math. Then he admitted himself to Brown University as a CS student. During his university classes, he interned at LinkedIn and a news-sharing website called Flipboard. Then he took a chance to go for a Thiel Fellowship, which is very famous among entrepreneurs all over the world. Let me tell you an interesting story about the Thiel Fellowship: “If you admit yourself for the Thiel Fellowship, you have to drop out from your school.” So, Field also did this; he dropped out from his university. The Thiel Fellowship then gave him $100,000 to start his own business or work on his idea.
With this balance, he started working on his idea to create a design tool, free for anyone, with the USP to make everything easy and user-friendly. Then his co-founder, Evan Wallace, joined his venture after completing his education from California.
Raising Funds:
It all started with that $100,000 from the Thiel Fellowship. Then they started with their vision in 2012. When Figma was publicly released on September 27, 2016, they raised a significant amount of money from different series. They onboarded their first funds and had a legendary investor and mentor like Peter Thiel, so what’s the worry about?
Figma raised its first investment as seed funding—almost $3.8 million from Index Ventures in 2013. Till now, Figma has raised almost $750 million through 8 funding rounds, with a valuation of $12.5 billion. Below is their funding chart:
- Seed Funding: $3.8 million from Index Ventures in 2013
- Series A: $14 million in December 2015, led by Greylock
- Series B: $25 million in February 2018, led by Kleiner Perkins
- Series C: $40 million in February 2019, led by Sequoia Capital
- Series D: $50 million in April 2020, led by Andreessen Horowitz
- Series E: $200 million in June 2021, led by Durable Capital Partners
Business Strategy and Growth:
Figma’s business strategy was simple: provide most of its features absolutely free for its users. They retained their users by offering the best features and user experience. They followed the CAPS model: Create something people need that has a big market, run ads to show their services to attract people or retain their engagement, provide something valuable, and then introduce subscription or paid methods.
Even now, they have lots of designs available for free, but most users opt for paid subscription-based services for better quality.
Their strategy is simple but provides immense value. I always say and write everywhere: “If you solve a big problem and make it easy, you will earn more money.” Nowadays, people love everything to be easy and accessible. Figma offers monthly and yearly subscription methods for its paid tools.
Figma’s growth has been astonishing. It hit a $10 billion valuation in just 5 years of business. Its monthly active users are almost 4 million, all of whom are paid subscribers. They grew their paid users by almost 200% since 2020.
Regarding revenue, Figma’s numbers are impressive. In the fiscal year 2023, its revenue was $700 million, and in 2024, it is predicted to hit at least $1 billion.
Competition:
Figma’s competition includes some big names like UXPin, Sketch, and Adobe XD. To counter this, Adobe made an offer on September 15, 2022, to acquire Figma for $20 billion. However, the deal is yet to be finalized due to regulatory approvals. As of 2023, the deal is still pending. Interestingly, while Figma’s valuation is $12.5 billion, Adobe’s offer of $20 billion demonstrates its immense potential.
Till then, stay healthy and happy. See you on next blog.