Figma Series E

Figma raised $200M at a $10B valuation in June 2021, which means a16z and Durable Capital paid approximately 50x ARR for collaborative rectangles. I've spent the past decade watching designers argue about Sketch versus Figma in Slack channels with the fervor of early aughts indie rock forum wars, and I'll admit—Figma won decisively. But a $10B price tag for browser-based design tools feels like venture capital's equivalent of buying Supreme box logo hoodies: yes, there's real cultural cachet here, but you're also paying a fortune for the logo and the moment. The company was genuinely profitable at smaller scale, growing fast with enterprise customers, building plugins and community like it's 2010 WordPress. Strong fundamentals, sure. But ten billion dollars? That's not pricing in growth—that's pricing in the fantasy that every company becomes the "default" so completely that Adobe has no choice but to acquire you at an even more demented valuation.

The timing here matters more than the pitch deck. June 2021 sits in that cocaine-confidence window between "wow, SPACs!" and "oh god, what have we done?" Everyone was raising mega-rounds at stratospheric valuations because money was free and growth-at-all-costs hadn't yet revealed itself as the financial equivalent of a juice cleanse—feels great until you actually need nutrients. Zoom was trading at 50x sales. Figma's investors were doing pattern-matching on other collaboration tools that exploded during COVID, betting that hybrid work meant infinite design tool budget expansion. I remember this period viscerally: every SaaS company suddenly claiming they were "essential collaboration infrastructure" while my own Figma usage consisted mainly of leaving passive-aggressive comments on marketing decks. The market was pricing in a future where every company becomes a tech company that needs design systems, which is technically true but also the kind of thinking that leads to $500M ARR companies being valued like they're going to replace Microsoft.

Here's what keeps this from being a truly bad deal: Figma actually shipped a genuinely superior product that designers loved with cult-like devotion, achieved real revenue scale, and built a proper moat through network effects and file format lock-in. Dylan Field didn't just build Sketch-but-in-browser; he built a platform where collaboration happened natively, where version control didn't make you want to throw your laptop, where plugins created an ecosystem. The competitive dynamics favored Figma heavily—Adobe XD was a joke, Sketch got caught flat-footed on collaboration, InVision imploded in slow motion. A16z's signaling here actually meant something because they'd backed other bottoms-up enterprise winners. The exit math even worked! Adobe offered $20B fifteen months later, which would've been a clean 2x for these investors. Except, well, regulatory hell. That's the rub with assigning valuations that only work if a megacorp acquires you to prevent disruption: sometimes the government says no.

But I can't shake the feeling that this deal represents everything exhausting about 2021 venture capital—the assumption that one good product equals infinite market expansion, that "winner take all" applies to every category, that 50x ARR multiples are rational if you just believe hard enough. Post-deal, Figma's growth necessarily decelerated because you can only sign every design team once. The revenue isn't compounding forever; it's hitting saturation in a defined market. When the Adobe deal collapsed, suddenly Figma had to exist as an independent company justified by fundamentals rather than acquisition fantasy, valued at a number that requires either going public in a punishing environment or raising again at flat/down terms. I'm not saying Figma isn't a great company—it absolutely is. I'm saying $10B was paying for vibes and TAM expansion hallucinations, and vibes don't compound at 40% annually when interest rates remember they exist.