What is the Figma Effect in tech IPOs?

The Figma Effect refers to how Figma's anticipated $13+ billion IPO could serve as a catalyst to reopen the tech IPO market after years of dormancy since 2021. If successful, Figma's public offering could restore investor confidence and trigger a wave of other tech companies going public.

Why has the tech IPO market been frozen since 2021?

The tech IPO market entered a deep freeze due to rising interest rates, economic uncertainty, and a series of disappointing IPO debuts. Many promising tech companies have remained private, waiting for market conditions to improve, creating a bottleneck throughout the venture capital ecosystem.

What companies benefit from tech IPO market revival?

Trading platforms like Coinbase Global (COIN) and Robinhood Markets (HOOD) benefit from increased trading volume, while investment banks such as Goldman Sachs Group (GS) gain from underwriting business. Venture capital firms holding private tech stakes also benefit from liquidity events and improved valuations.

How to invest in IPO market revival stocks?

You can invest in companies positioned to benefit from IPO market revival through platforms like Nemo, which offers commission-free investing and fractional shares starting from $1. Focus on trading platforms, investment banks, and venture capital firms that profit from increased market activity.

Is investing in tech IPO stocks risky?

Yes, all investments carry risk and you may lose money. Companies benefiting from IPO activity aren't guaranteed positive returns, and the tech sector remains sensitive to interest rate changes, regulatory developments, and broader economic conditions. Market activity can decline rapidly.

Why invest in IPO-related companies now?

The potential IPO market revival represents a fundamental shift in how investors view tech companies. After years of private market dominance, mature tech companies are reaching a point where public markets offer advantages in liquidity, employee compensation, and capital access.

When will the tech IPO market reopen?

The timing depends largely on Figma's IPO success and broader market conditions. Interest rates appear to have stabilized and economic uncertainty has decreased, but the market's reception of Figma's offering will likely influence dozens of other companies considering IPOs.

What makes Figma IPO different from 2021 offerings?

Figma's IPO timing suggests confidence in both their business model and improved market conditions, unlike the rushed 2021 offerings driven by sky-high valuations and excessive investor appetite. The company has reached mature scale where public markets make strategic sense.

How do trading platforms profit from IPO revivals?

Trading platforms generate revenue from increased market activity, and IPOs typically create significant trading volume both at launch and in subsequent months. The democratization of investing through commission-free platforms has also expanded retail investor access to new offerings.

Can I buy fractional shares of IPO-related stocks on Nemo?

Yes, Nemo offers fractional shares starting from just $1, making IPO-related investments accessible to all investors. The ADGM-regulated platform provides commission-free investing with AI-driven insights to help you participate in potential market shifts with proper risk management.

The Figma Effect: When Design Software Unlocks the IPO Floodgates

• 6 min read

• Published on 23 July 2025

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Figma IPO Effect: Unlocking Tech IPO Market & Investment

Summary

Figma's potential $13B+ IPO may signal a revival for the dormant tech public offering market.
The tech IPO market has been largely inactive since 2021, creating a bottleneck for private companies.
A successful offering could restore investor confidence, potentially unlocking a wave of new tech IPOs.
Venture capital firms, trading platforms, and investment banks are positioned to benefit from renewed market activity.

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Is One Design Company About to End the Great IPO Drought?

For what feels like an eternity, the tech IPO market has been about as exciting as watching paint dry. We’ve been stuck in a long, cold winter where promising companies have stayed stubbornly private, and venture capitalists have been sitting on their hands, waiting for a sign. To me, it seems the entire market has been holding its breath. Now, a design software company called Figma is stepping up to the plate, and its public offering could be the signal we’ve all been waiting for.

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A Thaw in the Tech Tundra?

Let’s be honest, the party had to end sometime. Back in 2021, it felt like any tech firm with a decent pitch deck could go public and see its valuation soar. The hangover from that particular binge was brutal. Rising interest rates and a shaky economy slammed the door shut, leaving a queue of would be public companies stuck in the hallway. This created a bottleneck, a logjam of mature, valuable businesses with no clear path to the public markets.

Figma’s decision to go for it now is what makes this so interesting. It suggests that its backers, who are not exactly known for reckless gambling, believe the frost is finally beginning to thaw. If they pull off a successful IPO with a valuation north of $13 billion, it could send a powerful message to everyone else waiting in the wings. It might just be the catalyst that turns this trickle of activity back into a flood.

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Why We're All Watching a Software Firm

Frankly, I don’t spend my days thinking about collaborative design software. What I do care about, however, is a market signal. Figma has become the canary in the coal mine for the tech sector. Its success or failure on the public stage will likely have consequences far beyond its own balance sheet. A strong debut could restore confidence across the board, encouraging other tech darlings to finally take the plunge.

This creates a potential ripple effect. Think about the companies that make their money from market activity. Trading platforms like Robinhood and Coinbase could see a welcome surge in volume as investors pile into new stocks. The big investment banks, the ones who underwrite these deals, would certainly be popping champagne corks as their advisory business roars back to life. It’s a whole ecosystem that has been lying dormant.

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Playing the Potential Revival

So, how does a regular investor approach this? You could try to bet on individual IPOs, but that’s a notoriously risky game. A more pragmatic approach, I think, is to look at the companies that provide the picks and shovels for this potential gold rush. It’s this broader thinking that informs investment themes like The Figma Effect, which considers the platforms and financial players that may benefit from a market thaw. By looking at the infrastructure of the market, you’re not betting on one company’s success, but on the revival of the trend itself.

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A Healthy Dose of Scepticism

Of course, let’s not get ahead of ourselves. This is investing, not a fairy tale, and nothing is ever guaranteed. A successful Figma IPO does not automatically mean every subsequent offering will be a hit. The market could easily get spooked again by inflation data or some unforeseen global event. All investments carry risk, and it’s entirely possible to lose money. The tech sector is sensitive, and the companies that thrive on market activity can just as easily suffer when it dries up. This is a potential opportunity, not a sure thing. We are simply reading the tea leaves, and right now, they’re starting to look a little more interesting than they have in years.

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Deep Dive

Market & Opportunity

Figma is targeting a valuation exceeding $13 billion in its upcoming IPO.
A successful IPO could signal a revival of the tech public offering market, which has been largely dormant since 2021.
The potential reopening of the IPO market could create a ripple effect, encouraging other venture-backed firms to go public.
Venture capital firms could see liquidity events, allowing them to realize returns on their investments in mature private companies.

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Key Companies

Coinbase Global Inc (COIN): A trading platform that could see increased activity and trading volume from new public offerings.
Robinhood Markets, Inc. (HOOD): A trading platform positioned to benefit from increased trading volume generated by new IPOs and greater retail investor access.
The Goldman Sachs Group, Inc. (GS): An investment bank that stands to benefit from an increase in underwriting business as more companies go public.

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Primary Risk Factors

All investments carry risk and you may lose money.
The tech sector remains sensitive to changes in interest rates, regulatory developments, and broader economic conditions.
A disappointing debut for a major IPO like Figma's could extend the current IPO drought.
Companies that benefit from market activity, like trading platforms, can also suffer when that activity declines.
There is no guarantee that a revival of the IPO market will be sustained or that all new offerings will be successful.

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Growth Catalysts

A successful, high-profile tech IPO could restore market confidence and trigger a wave of new offerings from other companies.
The democratization of investing through commission-free platforms allows broader retail access to IPOs, potentially creating more sustained demand.
Interest rates appear to have stabilized, potentially improving market conditions for new public offerings.
Increased IPO activity provides liquidity for venture capital firms, which can drive up valuations in both public and private markets.

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How to invest in this opportunity

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Frequently Asked Questions

This article is marketing material and should not be construed as investment advice. No information set out in this article be considered, as advice, recommendation, offer, or a solicitation, to buy or sell any financial product, nor is it financial, investment, or trading advice. Any references to specific financial product or investment strategy are for illustrative / educational purposes only and subject to change without notice. It is the investor’s responsibility to evaluate any prospective investment, assess their own financial situation, and seek independent professional advice. Past performance is not indicative of future results. Please refer to our Risk Disclosure.

The Figma Effect: When Design Software Unlocks the IPO Floodgates

The Figma Effect: When Design Software Unlocks the IPO Floodgates

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Summary

Is One Design Company About to End the Great IPO Drought?

A Thaw in the Tech Tundra?

Why We're All Watching a Software Firm

Playing the Potential Revival

A Healthy Dose of Scepticism

Deep Dive

Market & Opportunity

Key Companies

Primary Risk Factors

Growth Catalysts

How to invest in this opportunity

Frequently Asked Questions

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